Lead Opinion
[¶ 1.] Wintеr Brothers Underground (Winter Brothers) appeals the trial court’s order granting summary judgment to the City of Beresford (Beresford) and Ram-stad Construction (Ramstad). We affirm.
[¶ 2.] On July 10, 2000, Beresford solicited bids from contractors to prepare a parcel of land for the construction of a Slumberland Furniture Regional Distribution Center (Slumberlаnd). The project included storm sewer, water main, sanitary sewer and other site improvements associated with the construction of Slumberland. Beresford advertised its invitation to bid and received four bids, two of which included Winter Brothers and Ramstad.
[¶ 3.] The bid consisted of 31 line items that required bidders to enter either a lump sum bid or а unit price bid. In particular, Item 3 asked for the bidder’s lump sum bid to grub and clear the site. This work included “all hauling, crushing, rubberizing, labor, tools and workmanship and disposing of all items designated for removal.” The bid also forbade any conditional bids and stated, “[a]ll questions shall be directed to ... Larson Engineering!.]”
[¶ 4.] On July 6, prior to submitting his bid, Cliff Ramstad callеd Jerry Zeimetz (Zeimetz), the city administrator, and inquired about the possibilities of leaving any excess dirt on the site and disposing of the trees by burning them on site. After contacting the fire marshal, Zeimetz told Ramstad that leaving the dirt and burning the trees would be acceptable. Ramstad also asked Daryl Englund (Englund), the city engineer, if it would be acceptable to place any excess dirt from the project on the adjacent property owned by Beresford. Englund determined this would not pose a problem. Ramstad did not call Larson Engineering to ask these questions, as the bid required. Instead Ramstad relied upon the statements of Zeimetz and En-glund. Bеresford did not file an addendum to the bid explaining that burning the trees and placing the dirt on the adjacent property would be. acceptable.
[¶ 5.] After publicly opening the four bids on July 10, Zeimetz announced that Ramstad was the lowest bidder at $271,990.25. Winter Brothers was the next lowest bidder at $280,268.50. Following the opening, Robert Winter (Wintеr) asked to look at some of the prices on Ramstad’s bid. Winter noticed that Item 3 of Ramstad’s bid was blank, and he informed the city officials. The bid schedule required bidders to complete a bid for each item requested and forbade any conditional bids. Because of this, Winter informed the city officials that the Ramstad bid was illegal.
[¶ 6.] In response to Item 3, the city officials asked Ramstad, in Winter’s presence, if he would accept a bid of zero for Item 3 on the bid schedule. Ramstad agreed. The Beresford City Council accepted Ramstad’s bid the evening of July 10. Ramstad began the project the following day.
[¶ 7.] In the weeks that follоwed, Winter Brothers brought to Beresford’s attention two additional issues regarding Ram-stad’s bid. One issue related to Ramstad’s conversations with Zeimetz and Englund about the excess dirt and burning the trees. It was discovered that Ramstad had annotated on the back of his bid the understandings Ramstad had with En-glund and Zeimetz about the project. In addition, Ramstad annotated that a manufacturing holdup would delay the installation of storm sewer manhole/drop inlets.
[¶ 8.] On August 2, 2000, with the project underway, Winter Brothers filed suit seeking, intеr alia, declaratory relief and an order to enjoin the award of the bid to Ramstad. Beresford and Ramstad brought motions to dismiss for Winter Brothers’ lack of standing as an unsuccessful bidder. On September 7, Winter Brothers filed a motion to amend its complaint, adding Carleen Weatherton (Weatherton) as an additional plaintiff and additional grounds for an injunction. On October 11, the trial court granted Winter Brothers’ motion to amend and held Beresford’s and Ramstad’s motions to dismiss in abeyance until trial. Since the project was completed by September 7, Winter Brothers conceded that its claim for injunctive relief was moot, but continued its сlaim for damages.
[¶ 9.] On September 8, 2000, Ramstad brought a second motion to dismiss, which Beresford later joined, claiming Weather-ton was not a taxpayer with standing to sue. The trial court denied this motion. On February 28, 2001, Ramstad brought motion for summary judgment against Winter Brothers. After a hearing, the trial court granted Ramstad’s motion. The court concluded, ‘Winter does not have standing as an alleged aggrieved bidder to bring an action against [Beresford] or [Ramstad].” The court further concluded that Beresford “complied with the competitive bidding laws of the State of South Dakota and acted within its discretion in awarding [Ramstad] the contract.... ” The trial court did not consider Ramstad’s motion for summary judgment with regard to Weatherton’s standing, concluding it was “unnecessary to reach the issue.”
[¶ 10.] Winter Brothers appeals on the following issues: (1) whether Winter Brothers has standing to sue as an unsuccessful bidder, and (2) whether Weather-ton has standing to sue as a taxpayer.
STANDARD OF REVIEW
[¶ 11.] Our standard of review оn a trial court’s grant of summary judgment is well established. “[W]e will affirm only if all legal questions have been decided correctly and there are no genuine issues of material fact.” H & W Contracting, LLC, v. City of Watertown,
ANALYSIS AND DECISION
[¶ 12.] 1. WHETHER WINTER BROTHERS HAS STANDING TO SUE.
[¶ 13.] Whether a party has standing to sue is a legal question, which this Court reviews under the de novo standard. H &W Contracting,
[¶ 15.] Winter Brothers claims that Ramstad’s bid was illegal, and therefore Winter Brothers was the lowest rеsponsible bidder and entitled to the Slum-berland project. This Court addressed a similar situation in Tri-State Milling Co. v. Bd. of County Comm’rs,
[¶ 16.] b. Favoritism Gives Unsuccessful Bidders Standing to Sue.
[¶ 17.] This Court has recently, however, adopted a limited exception to the rule announced in Tri-State. In H & W Contracting, this Court stated, “[w]hen the bidding process has been undermined by ‘favoritism, improvidence, extravagance, fraud [or] corruption,’ disappointed bidders have standing to sue on behalf of the public’s interest.”
[¶ 18.] c. Favoritism Defined.
[¶ 19.] Black’s Law Dictionary defines “favoritism” as “[i]nvidious preference and selection based on friendship and factors other than merit.” Blaсk’s Law Dictionary 609 (6th ed. 1990). In American Totalisator Co., Inc. v. Seligman, a Pennsylvania court held that favoritism exists whenever the bidders are treated otherwise than by a common standard.
[¶ 21.] (1) Accepting Ramstad’s Bid with Item 3 Blank.
[¶ 22.] Winter Brothers alleges that Beresford demonstrated favoritism by accepting Ramstad’s bid even though Item 3 was blank. Beresford asked Ramstad if he agreed that a zero could be inserted in the blank and Ramstad agreed. Although the terms of the bid documents and statutory authority prohibited changing the bid, it was within Beresfоrd’s discretion to correct a clerical error by inserting a zero in the blank line. H &W Contracting,
[¶ 23.] (2) Answering Ramstad’s Questions about Burning Trees and Disposing Dirt.
[¶ 24.] A second claim of favoritism arose out of Item 3. Winter Brothers also alleged that Beresford did not have authority to answer Ramstad’s question about whether it could burn the trees and dispose of the dirt on the construction site. In this case, Beresford did not engage in favoritism by answering Ramstad’s questions about thе Slumberland project. While we agree with Winter Brothers that Beresford should have notified the other bidders of the clarification, failing to do so does not amount to favoritism. Beresford merely answered Ramstad’s questions. Courtesy is not favoritism. There is nothing to indicate that if Winter Brothers had called Beresford, it would not hаve received the same information. In fact, Winter Brothers admitted it also intended to dispose of the dirt on the construction site. Even if Winter Brothers had been given the same information as Ramstad, Winter Brothers would still not be the low bidder.
[¶25.] (3) Accepting Ramstad’s Bid with Annotations on the Back.
[¶ 26.] Winter Brothers complained that Beresford accepted Ramstad’s bid with annotations on the back explaining that late delivery of manholes would delay completion of the project. Ramstad’s annotations were not noticed until Winter Brothers called the annotations to Beres-ford’s attention after Beresford acceрted the bid. Therefore, Beresford did not consider the annotations when it awarded the bid to Ramstad.
[¶ 27.] Beresford had discretion
[¶ 28.] The purpose of public bidding is to obtain the lowest price for the work to be done. SDCL 5-18-2. Winter Brothers would have Beresford refuse the lowest bid on technicalities and pay Winter Brothers more to do the work. The bidding process should not be so intricate that the goal of obtaining the lowest price is obscured by technicalities and litigation. A public body possesses great discretion in determining the lowest responsible bidder. As the Pennsylvania Supreme Court noted, “[although the rule of compliance is ... emphasized, courts have not eliminated the discretionary aspect of executive decision making when the government is confronted with a non-compliant bid that it might choose to consider to achieve effective utilization of the public fisc.” Gaeta v. Ridley Sch. Dint,
[¶ 29.] Winter Brothers’ position would cost local governments time and money and promote uncertainty. This was not a case where the low bidder was denied the contract in favor of a higher bidder. Winter Brothers bid $8,000 more than the lowest bid and it seeks relief that would cost Beresford more money. We will not punish Beresford for accepting the lowest bid.
[¶ 30.] 2. WHETHER WEATHER-TON HAS STANDING TO SUE AS A TAXPAYER.
[¶ 31.] The trial court did not consider Ramstad’s motion for summary judgment with regard to Weatherton’s standing to sue, concluding it was “unnecessary to reach the issue.”
[¶ 32.] SDCL 9-1-6 provides that “[a]ny citizen and taxpаyer residing within a municipality may maintain an action or proceeding to prevent, by proper remedy, a violation of any provision of [municipal law].” Weatherton must demonstrate, therefore, that she was both a citizen and taxpayer of Beresford. Although Weath-erton resided in Beresford, she did not own any real property in the City. Weath-erton argued, however, that since she paid sales tax she was a taxpayer. We previously rejected this argument in Stumes v. Bloomberg, where we stated, “[u]nder the South Dakota statutory scheme, the mere payment of a sales tax by a consumer does not fit within the definition of a taxpayer.”
NO REMEDY
[¶ 33.] Even if Winter Brothers or Weatherton had standing, there was no remedy. Winter Brothers could not seek damages from Beresford fоr its rejection of Winter Brothers’ bid, nor could Winter Brothers seek damages for its bid preparation. H & W Contracting,
[¶ 34.] The trial court is affirmed.
Notes
. The back of Ramstad’s bid stated the following:
The bid is to be that we bum the trees on site a. All extra dirt will remain on city property on site. The manufacturing hold up of 48" diameter storm sewer mаnhole/drop inlet will not be built by completion date, therefore, seeding will not be completed after drop inlets are installed.
. H & W Contracting also limited the types of suits that can be brought: "Because a disappointed bidder's standing is based on the protection of public interest, it extends only to suits for declaratory or equitable relief seeking to compel compliance with the competitive bid laws.... However, suits by disappointed bidders seeking damages perform no such legitimate public service.”
. "The bidding requirements, whether they be statutory or part of the invitation itself, do not act to bind the soliciting agency to any one bidder, regardless of that bidder's compliance with the specifications. Rather, public authorities are vested with wide latitude in determining which bids meet the qualification of lowest respоnsible bidder.” Spiniello Companies v. City of Cleveland, No. 76411,
Concurrence Opinion
(concurring in result).
[¶ 38.] I concur in result because no prejudice was shown even though the еvidence shows that violations of the bidding laws occurred.
[¶ 39.] The contract specifications required all inquiries to be directed to Larson Engineering. Despite this, Ramstad Construction contacted the City Administrator who obtained for them the right to 1) leave excess dirt on the site and 2) dispose of the trees by burning them on the site. This was favoritism, and all other bidders should have been advised immediately by facsimile or phone.
[¶ 40.] In addition, for Beresford to provide Ramstad an opportunity to accept a bid of zero for item 3 on the bid schedule constitutes favoritism even though it did not result in any damage or prejudice in this situation. Better performance by the bid-letter and the successful bidder, resulting in equal treatment for all bidders, should be required in all future bid lettings.