Davis & Associates, Inc. v. Midcon, Inc.

1999 NMCA 047, 978 P.2d 341, 127 N.M. 134
CourtNew Mexico Court of Appeals
DecidedMarch 4, 1999
Docket19,437
StatusPublished
Cited by4 cases

This text of 1999 NMCA 047 (Davis & Associates, Inc. v. Midcon, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis & Associates, Inc. v. Midcon, Inc., 1999 NMCA 047, 978 P.2d 341, 127 N.M. 134 (N.M. Ct. App. 1999).

Opinion

OPINION

DONNELLY, J.

{1} Davis and Associates, Inc. (Davis), appeals from an order of the district court dismissing its cross-claim for unjust enrichment and constructive trust against Mideon, Inc. (Mideon), the successful bidder in a public works project. The principal issue presented on appeal is whether NMSA 1978, § 13-1-183 (1984), of the Procurement Code, NMSA 1978, §§ 13-1-28 to -199 (1984, as amended through 1998), provides the exclusive remedy for an unsuccessful bidder who seeks to challenge the acts of a third party whose protest results in the rejection of the other’s bid. For the reasons discussed here, we affirm the order dismissing the cross-claim.

FACTS AND PROCEDURAL POSTURE

{2} On April 17, 1995, the State of New Mexico, Department of Military Affairs (the Department), solicited bid proposals for the construction of a new headquarters building and a new state maintenance office to be built in Santa Fe County, New Mexico.

{3} Davis, a licensed general contractor, submitted bid proposals for both buildings and was the low bidder for the headquarters building. Mideon also submitted bids on the construction of the two buildings. Mideon was not the low bidder on the headquarters building, however it was the low bidder for the combined two projects.

{4} On June 19, 1995, Mideon protested the bid of Davis, asserting that Davis failed to “properly designate subcontractors for a number of bid items, in violation of the Subcontractors Fair Practices Act [NMSA 1978, §§ 13-4-31 to —42 (1988)] and the Instructions, Conditions and Notices to Bidders [contained in] the Contract Documents.”

{5} A week later, on June 26,1995, Davis wrote to the Department, stating that “[d]ue to an internal problem with manpower and time, we failed to list [certain] subcontractors on our listing form June 19.” This letter then listed a number of contractors that it proposed to use. Thereafter, on June 28, 1995, Davis wrote again to the Department stating, in part, “[p]lease be advised Davis ... is in full compliance with the Subcontractors Fair Practice [sic] Act. The Act allows a contractor to do any of the work themselves if they so choose and are properly licensed.”

{6} The Department rejected Davis’ bid and notified the parties that it was electing to build only the headquarters building and was cancelling its proposal to construct the maintenance building. The Department then awarded the contract for the headquarters building to Mideon. Thereafter, Davis filed a petition in the district court seeking judicial review of the bidding process, pursuant to Section 13-1-183 of the Procurement Code. Mideon filed a motion to intervene in the district court proceeding and the motion was granted on August 15,1995.

{7} On December 19, 1995, the district court heard an appeal from the ruling of the Department rejecting Davis’ bid and which awarded the construction project to Mideon. At the conclusion of the hearing, the district court orally announced its ruling and held that the bid submitted by Davis was proper and that the action of the Department in rejecting Davis’ bid was arbitrary, capricious, and contrary to law.

{8} Shortly thereafter, Davis filed a motion to amend its petition for judicial review in order to add a complaint against the Department for damages incurred for the rejection of its bid, and to file a cross-claim against Mideon for unjust enrichment and the imposition of a constructive trust.

{9} Following a hearing, the district court entered a partial judgment determining that the protest determination of the Department is “contrary to law” and that “the Davis bid is hereby declared to be ... a responsive bid which should have received full, fair, and good faith consideration as a valid and responsive bid.” The district court also granted Davis’ motion to amend its petition to include causes of action against both the Department and Midcon but it dismissed Davis’ cross-claim. Davis filed an appeal from the order on November 4, 1996. That appeal was dismissed by this Court in a memorandum opinion on August 12, 1997, because the appeal had been taken from a partial judgment which was not a final order.

{10} After remand, the district court entered a judgment awarding Davis damages against the Department for the amount of its bid preparation expenses in the amount of $16,554, together with its costs. The judgment against the Department is not part of this appeal, and we are informed that the matter has been settled by the parties. In a separate order entered on October 3, 1996, the district court again granted Midcon’s motion to dismiss Davis’ cross-claim. Davis filed a timely appeal.

DISCUSSION

{11} Davis asserts that the district court erred in dismissing its cross-claim against Midcon for unjust enrichment and the imposition of a constructive trust. It reasons that because Midcon’s bid protest was determined by the district court to have been groundless, Midcon’s acceptance of the contract and subsequent performance in constructing the headquarters building resulted in Davis being unjustly deprived of the right to perform the contract to which it was entitled. Davis also argues that Midcon was unjustly enriched by virtue of profits it made on the project; profits which Davis contends that it otherwise could have made. Davis contends that Midcon should not be entitled to retain the profits it received and that Midcon should be declared to be a constructive trustee of profits which Davis would have earned if its bid had been properly accepted by the Department and it had been allowed to act as the prime contractor on the construction project.

{12} In answer to these contentions, Midcon urges this Court to affirm the dismissal of the cross-claim because under this Court’s decision in State ex rel. Educational Assessments Systems, Inc. v. Cooperative Educational Services of New Mexico, Inc., 115 N.M. 196, 202, 848 P.2d 1123, 1129 (Ct. App.1993) (EAS), the Procurement Code does not provide a private right of action by a disappointed bidder against the successful bidder. See also Planning & Design Solutions v. City of Santa Fe, 118 N.M. 707, 715, 885 P.2d 628, 636 (1994) (where governmental entity improperly restricts party’s bid, remedy of rejected bidder against governmental entity is limited to recovery of reasonable and provable bid preparation costs); Hamilton Roofing Co. of Carlsbad, Inc. v. Carlsbad Mun. Schs. Bd. of Educ., 1997—NMCA-053, ¶ 2, 123 N.M. 434, 941 P.2d 515 (local public body may be required, under the Procurement Code, to compensate contractor for actual expenses, plus reasonable profit, where contractor did not act fraudulently or in bad faith, and court finds contract award was in violation of law).

{13} Midcon correctly notes that the Procurement Code, although providing a mechanism to protest and appeal the denial of a bid submitted by an unsuccessful bidder, does not create, either expressly or impliedly, a private right of action for damages against the State. See EAS, 115 N.M. at 200, 848 P.2d at 1127.

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Cite This Page — Counsel Stack

Bluebook (online)
1999 NMCA 047, 978 P.2d 341, 127 N.M. 134, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-associates-inc-v-midcon-inc-nmctapp-1999.