Dahme Construction Co. v. Web Water Development Ass'n

438 N.W.2d 550, 1989 S.D. LEXIS 59, 1989 WL 35271
CourtSouth Dakota Supreme Court
DecidedApril 12, 1989
DocketNo. 16155
StatusPublished
Cited by3 cases

This text of 438 N.W.2d 550 (Dahme Construction Co. v. Web Water Development Ass'n) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dahme Construction Co. v. Web Water Development Ass'n, 438 N.W.2d 550, 1989 S.D. LEXIS 59, 1989 WL 35271 (S.D. 1989).

Opinions

WUEST, Chief Justice.

Dahme Construction Company, Inc. (Dahme), a South Dakota corporation, appeals a trial court order granting summary judgment in favor of WEB Water Development Association, Inc. (WEB).1 We affirm the decision of the trial court.

WEB is a nonprofit corporation organized and existing under the laws of this state.2 The corporation operates a rural water system in north central and northeastern South Dakota. The system draws water from the Missouri River and transports it via main and secondary pipelines to customers in nine counties. The project, which is now ninety percent complete, will ultimately serve 4100 rural families and fifty municipalities.

WEB was incorporated in 1978. As a nonprofit corporation, WEB invited individuals, municipalities and other rural water associations to become members in the corporation in lieu of issuing shares of stock. Applications for membership had to be approved by the board of directors. Not everyone residing in the area serviced by WEB became a member. Only members of the corporation, upon payment of a membership fee, may purchase water from WEB.

The cost of completing the WEB project is approximately $117,500,000. Most of the construction funds for the project are provided by the United States Department of the Interior, Bureau of Reclamation (Bureau). According to an agreement signed by WEB and the Bureau on September 29, 1983, seventy-five percent of the construction funds provided by the Bureau was in the form of grants. The remaining twenty-five percent was in the form of loans. At the time of the hearing on WEB’s motion for summary judgment, WEB had received approximately $70,000,000 from the Bureau.

WEB also receives money from the Oahe Conservancy Sub-District. This entity was established in 1960 to enhance water development in north central South Dakota. On July 6, 1979, the Sub-District agreéd to provide $3,100,000 to WEB over a ten-year period ending in 1990. These funds, the purpose of which was to entice federal financial assistance, were to be raised from a mill levy on real property located in the area serviced by WEB. At the time of the summary judgment hearing in this matter, WEB had received $1,750,000 from the Sub-District.3

[552]*552During 1987, WEB solicited bids for the construction of a main transmission pipeline (Contract 4-1C). Dahme responded with a bid in the amount of $2,130,523. A Wyoming construction company, Larry’s, Inc. (Larry’s), also submitted a bid to WEB. Larry’s bid was $2,100,752.80. Because Larry’s bid was lower than that of Dahme, WEB awarded Contract 4-1C to Larry’s on January 21, 1988.

On January 26, 1988, Dahme filed suit against WEB, seeking enforcement of South Dakota’s preference in public contracts law and cancellation of the contract between WEB and Larry’s. Dahme claimed that it should have been awarded Contract 4-1C, even though its bid was higher than Larry’s, because it was the preferred bidder under SDCL 5-19-3, which provides:

When a contract is let by the state, a department thereof, any county, city, town, school district or other public corporation of the state for the erection, construction, alteration or repair of any public building, other structure or addition thereto, or for any public work or improvement or for the purchase of any goods, merchandise, supplies or equipment of any character, the contract shall be let to the lowest responsible bidder. However, a resident bidder shall be allowed a preference on a contract against the bid of any bidder from any other state which enforces or has a preference for resident bidders. The amount of the preference given to the resident bidder shall be equal to the preference in the other state.

Wyoming, the state in which Larry’s is incorporated, has a similar statute. Under Wyo.Stat.Ann. § 16-6-102(a), “the state, any department thereof, or any county, city, town, school district, community college district or other public corporation” shall award a contract to “the responsible certified resident making the lowest bid if the certified resident's bid is not more than five percent (5%) higher than that of the lowest responsible nonresident bidder.”

The difference between Dahme’s and Larry’s bids was $29,770.20. Because its bid was only one and one-half percent higher than Larry’s, Dahme claimed that SDCL 5-19-3 required WEB to award Contract 4-1C to it instead of Larry’s.

WEB subsequently brought a motion for summary judgment pursuant to SDCL 15-6-56(b), asserting that Dahme had demonstrated no genuine issue of material fact. The trial court granted WEB’s motion, reasoning that because the bulk of the funds for the project come from a federal agency, WEB was obligated to comply with federal procurement standards. These standards required that contracts be awarded to the bidder whose bid was “most advantageous to the recipient, price and other factors considered.” The trial court concluded that the provisions in WEB’s agreement with the Bureau and the procurement standards conflicted with SDCL 5-19-3. Therefore, under SDCL 5-19-7,4 said contract provisions and federal procurement standards would prevail over the preference stated in SDCL 5-19-3.

The only question presented to us by this appeal is whether the trial court erred in granting summary judgment in favor of WEB. In reviewing a trial court order granting summary judgment, we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. Groseth Intern., Inc. v. Tenneco, Inc., 410 N.W.2d 159, 164 (S.D.1987). The evidence must be viewed most favorably to the non-moving party and reasonable doubts should be resolved against the moving party. Dahl v. Sittner, 429 N.W.2d 458, 461 (S.D.[553]*5531988); Wilson v. Great Northern Ry. Co., 83 S.D. 207, 212, 157 N.W.2d 19, 21 (1968). The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Ruane v. Murray, 380 N.W.2d 362, 364 (S.D.1986). Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, af-firmance of a summary judgment is proper. Ruple v. Weinaug, 328 N.W.2d 857, 859-60 (S.D.1983).

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Related

Nelson v. WEB Water Development Ass'n, Inc.
507 N.W.2d 691 (South Dakota Supreme Court, 1993)

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Bluebook (online)
438 N.W.2d 550, 1989 S.D. LEXIS 59, 1989 WL 35271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dahme-construction-co-v-web-water-development-assn-sd-1989.