IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2021-CA-00667-COA
HOLLIDAY CONSTRUCTION, LLC APPELLANT
v.
GEORGE COUNTY, MISSISSIPPI APPELLEE
DATE OF JUDGMENT: 05/18/2021 TRIAL JUDGE: HON. KATHY KING JACKSON COURT FROM WHICH APPEALED: GEORGE COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: SAMUEL C. KELLY ALSTON FRANK LUDWIG ATTORNEYS FOR APPELLEE: MICHAEL JAMES BENTLEY ROBERT PAYNE SHEPARD JAMES STEPHEN FRITZ JR. NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: AFFIRMED - 12/13/2022 MOTION FOR REHEARING FILED:
BEFORE BARNES, C.J., McDONALD AND McCARTY, JJ.
McDONALD, J., FOR THE COURT:
¶1. Holliday Construction LLC (Holliday) appeals the George County Circuit Court’s
denial of compensatory damages after the court found that the County’s contract for
hurricane debris pickup with an out-of-state contractor was null and void. On appeal,
Holliday asserts that the circuit court’s decision not to award compensatory damages was
made without a substantial evidentiary basis and that a hearing should have been held to
determine Holliday’s compensatory damages. Finding no error, we affirm the circuit court’s
judgment.
FACTS AND PROCEDURAL HISTORY ¶2. On November 16, 2020, George County (the County) began soliciting proposals for
disaster debris removal and disposal services as the result of damage caused by Hurricane
Zeta. The County stated in its “Request For Proposals” (RFP) that the purpose of the RFP
and subsequent contracting activity was to secure the services of qualified, experienced
contractors who were capable of efficiently removing large volumes of disaster-generated
debris from a large area in a timely and cost-efficient manner and lawfully disposing of all
debris. The time for submitting proposals ended on December 4, 2020. The RFP did not
require proposers to have a certificate of responsibility.
A. Certificate of Responsibility
¶3. Mississippi Code Annotated section 31-3-21(1) (Rev. 2020) states:
It shall be unlawful for any person who does not hold a certificate of responsibility issued under this chapter to submit a bid, enter into a contract, or otherwise engage in or continue in this state in the business of a contractor, as defined in this chapter.
“The public policy behind requiring a certificate of responsibility [is] to protect the public
from improper construction . . .” and to obtain for the public the best available price through
competitive bidding with honest, competent contractors. Ace Pipe Cleaning Inc. v. Hemphill
Const. Co. Inc., 134 So. 3d 799, 806 (¶30) (Miss. Ct. App. 2014) (citing Ground Control
LLC v. Capsco Indus. Inc., 120 So. 3d 365, 368 (¶8) (Miss. 2013)). Contractors obtain a
certificate of responsibility from the Mississippi State Board of Contractors (MSBOC) after
showing that they are competent to perform the work outlined in specific areas or
classifications. See Miss. Code Ann. § 31-3-13(a) (Rev. 2020).
No contract for public or private projects shall be issued or awarded to any contractor who did not have a current certificate of responsibility issued by
2 said board at the time of the submission of the bid, or a similar certificate issued by a similar board of another state which recognizes certificates issued by said board. Any contract issued or awarded in violation of this section shall be null and void.
Miss. Code Ann. section 31-3-15 (Rev. 2020).
B. Contents of George County’s RFP
¶4. The RFP also included a provision which informed proposers that the county reserved
the right to accept or reject any and all proposals. Specifically, the RFP stated:
The COUNTY reserves the right to accept or reject any or all proposals, with or without cause, to waive technicalities, or to accept the proposals which, in its sole judgment, best serves the interest of the COUNTY, or to award a contract to the next most qualified proposers if a successful proposer does not execute a contract within thirty (30) days after approval of the selection by the COUNTY. The COUNTY has the right, to cancel a solicitation at any time prior to approval of the award by the COUNTY.
In addition, under the “Evaluation and Contract Award” section, the RFP stated that the
County retained the option to waive any irregularity in any proposal, or reject any and all
proposals should it be deemed in the County’s best interest to do so. The RFP stated that the
“award will be made to one or more [p]roposers that the [County] determines can accomplish
the requirements set forth in the [RFP] packet in a manner most advantageous to the
[County], cost and other factors considered or to reject any and all proposals.”
¶5. The following criteria was used by the County staff to evaluate the proposals and
make a selection: (1) references from past projects of similar size and scope, (2)
qualifications and experience of key staff on similar projects, (3) knowledge of the County
and local emergency management needs, (4) cost of services offered, and (5) use of minority-
and women-owned business.
3 ¶6. Each proposal submitted was also evaluated and ranked by an evaluation committee.
The contract was to be awarded to the most qualified proposer, per the following: “(1)
Contractor’s Experience/Past Performance (years of experience; similar size projects;
experience in debris removal and disposal) – weighted 30%, (2) Proposal/Individual
Credentials of Contractor and Team (key staff members; use of minority women owned
business; experience with [the Federal Emergency Management Agency (FEMA) or the
Mississippi Emergency Management Agency (MEMA)] programs/coordination - weighted
40%, and (3) Price – weighted 30%.”
¶7. The RFP also informed proposers that the project needed to be completed within a
certain time frame because FEMA declared that it would reimburse the county for seventy-
five percent of the hurricane clean-up costs if the project was completed by June 30, 2021.
C. Directives For Pricing
¶8. A “Contractor’s Price Proposal” packet was attached to the RFP as “Exhibit B,” which
contained a price proposal form for proposers to complete and submit to the county with total
bid amounts. It included the following provision: “This price proposal form must be fully
completed, signed, and submitted. No substitute forms will be accepted. Proposals
submitted without this fully completed price proposal will be rejected.” The price proposal
form also gave descriptions for the work that was to be done on the project as well as
assumed quantities for various categories of debris to be removed. Proposers were to
multiply their proposed unit price by the assumed quantity to generate an estimated price.
The unit price and price extension columns in the price proposal form were left blank for
proposers to fill in their estimated amounts.
4 ¶9. On November 23, 2020, the County published Addendum 1 to the RFP which revised
the estimated quantity of debris listed under the assumed quantity column for certain
categories on the price proposal form. In the initial RFP, the assumed quantity for “site
management and grinding of eligible vegetative debris at a Debris Management Site (DMS)
provided by the contractor” was 50,000; however, Addendum 1 increased the assumed
quantity to 150,000. “Loading and hauling of eligible vegetative debris reduced by grinding
from DMS to an approved landfill” was increased from 12,500 to 38,000. In addition,
“disposal of eligible vegetative debris reduced by grinding at an approved landfill” also was
increased from 12,500 to 38,000.
D. County’s Selection of CTC’s Bid
¶10. On December 14, 2020, the Board of Supervisors considered and evaluated the
proposals received. Custom Tree Care Inc. (CTC), an out-of-state contractor, submitted a
total bid of $1,686,613, which the County considered to be the lowest and best bid received.
Holliday submitted the next lowest bid in the total amount of $2,352,050. However, it was
revealed much later in the court proceedings that CTC used the first page of the price
proposal form from the original RFP instead of the revised first page of the price proposal
form from Addendum 1, which had increased assumed quantities for three of the categories
of debris to be removed. This explained the disparity between CTC’s total bid amount and
Holliday’s total bid amount.1
1 Had CTC submitted the correct first page of the revised price proposal form included in Addendum 1, its estimated total bid amount would have been $2,121,863, which was still $230,187 lower than Holliday’s bid amount.
5 E. Holliday’s Protest and The Contract Award
¶11. On December 20, 2020, Holliday sent a letter to the county protesting the award of
the contract to CTC. Holliday asserted that CTC was not qualified nor entitled to the award
of the contract because CTC did not hold a certificate of responsibility issued by the MSBOC
and required by Mississippi Code Annotated section 31-3-15.2 Holliday suggested that the
County obtain an opinion from the MSBOC to determine whether or not a certificate was in
fact required.
¶12. The County took the matter under advisement, and on December 21, 2020 met and
passed a resolution in response. In its resolution, the county cited to section 31-3-15, and
stated that in applying that statute, along with Mississippi Code Annotated section 31-3-1
(Rev. 2020),3 which defined “contractor” and “public project” and Mississippi Code
2 Section 31-3-15 states:
No contract for public or private projects shall be issued or awarded to any contractor who did not have a current certificate of responsibility issued by said board at the time of the submission of the bid, or a similar certificate issued by a similar board of another state which recognizes certificates issued by said board. Any contract issued or awarded in violation of this section shall be null and void. 3 Section 31-3-1 defines a “contractor” as follows:
Any person contracting or undertaking as prime contractor, subcontractor or sub-subcontractor of any tier to do any erection, building, construction, reconstruction, demolition, repair, maintenance or related work on any public or private project; however, “contractor” shall not include any owner of a dwelling or other structure to be constructed, altered, repaired or improved and not for sale, lease, public use or assembly . . . .
The section defines “public project” as “[a]ny project for erection, building, construction, reconstruction, repair, maintenance or related work which is funded in whole or in part with
6 Annotated section 31-7-1(g) (Rev. 2020),4 which defined “construction,” the County found
that the RFP was not for the purpose of building, altering, improving or renovating any
public building, public structure, public road, or other public real property. The County
further found that the eight items listed in Holliday’s protest as allegedly requiring a
contractor’s license were not a major part of the proposed contract (i.e., were far less than
50% of the value of the contract); that said items were not in the RFP for the purpose of
improving any public real property or to create something new to be used and enjoyed by the
public for years to come; that the said items listed were merely incident to (and for the
purpose of) cleaning up Hurricane Zeta damage and debris; that the said items have been
listed in accordance with state law and FEMA guidelines; and, therefore, the said items did
not require a contractor’s license for the work to be performed in accordance with the
proposed contract. The County also found that the RFP and the contract to be awarded were
for a service and not for a public project, as contemplated by section 31-3-15. The County
denied Holliday’s protest and proceeded to award the three-year contract to CTC, with the
option to renew for one additional year.5
¶13. Holliday sent its own request on December 30, 2020, to the MSBOC requesting that
public funds.” Id. 4 Section 31-7-1(g) defines “construction” as “the process of building, altering, improving, renovating or demolishing a public structure, public building, or other public real property. It does not include routine operation, routine repair or regularly scheduled maintenance of existing public structures, public buildings or other public real property.” 5 The written contract between the County and CTC included CTC’s price proposal that was submitted with the first page of the price proposal form from the initial RFP instead of the first page of the price proposal form from Addendum 1.
7 the board provide an opinion as to whether or not a certificate of responsibility was required
for the project.
F. Holliday’s Circuit Court Appeal and Complaint
¶14. Prior to receiving a response from the MSBOC, Holliday filed an appeal and
complaint in the Circuit Court of George County on January 6, 2021.6 In its complaint,
Holliday alleged that the “[C]ounty’s decision to award the contract to CTC had to be
overturned because CTC did not hold the required license from the MSBOC.” Holliday
further argued that the contract award was arbitrary or capricious because it violated clear
statutory requirements and was beyond the County’s scope or powers. According to
Holliday, it was entitled to the award of the contract as the lowest and best, responsive and
responsible bidder or, in the alternative, that it was entitled to compensatory damages for its
lost profits which Holliday would have earned had the contract been properly awarded.
Holliday also requested that the circuit court stay the contract award to CTC or, alternatively,
enter a preliminary injunction against the County to keep it from awarding the contract to
CTC. Holliday also requested that the court conduct an expedited hearing on the matter.
¶15. On January 8, 2021, Holliday served notice of a hearing on its request to stay the
contract, or alternatively, its request for a preliminary injunction. The hearing was set for
January 25, 2021.
¶16. The County filed its answer to Holliday’s circuit court appeal and “complaint” on
January 15, 2021. The County denied that Holliday was entitled to any relief requested. The
6 Although styled as a “complaint and appeal of decision,” Holliday did not allege any separate causes of action and merely appealed the County’s decision.
8 County pled that the requirement of a certificate of responsibility found in Mississippi Code
Annotated section 31-3-15 did not apply to the work outlined in the RFP and that Holliday
had no legal authority (or valid argument) for claiming that it did. In addition, the County
argued that if Holliday was seeking an injunction as a civil remedy outside the scope of its
appeal, then Holliday failed to state how it would suffer any irreparable injury if such an
injunction was not granted. The County attached its December 21, 2020 resolution to its
answer.
¶17. On January 20, 2021, Holliday filed a memorandum in support of its complaint further
arguing that the County’s decision to award the contract to CTC was arbitrary and capricious
and beyond the lawful power of the County. Holliday attached an opinion that it received
from the MSBOC on January 13, 2021, to its memorandum. In the opinion letter, the
MSBOC determined that “a certificate of responsibility was required to perform the scope
of work detailed in the RFP specifications because excavation, grading, drainage, and
landscaping work, all required a certificate of responsibility when the contract amount
exceeded fifty thousand dollars ($50,000.00).”
¶18. The circuit court held a hearing on Holliday’s request for stay or in the alternative
request for injunction on January 25, 2021. At the hearing, Holliday requested a stay of
performance on the contract until the court had an opportunity to consider the appeal. The
County argued that there was no authority for the court to grant an injunction. The court took
the matter under advisement.
¶19. On February 1, 2021, Holliday filed a motion to amend or supplement the appellate
record. Holliday argued that although the record contained portions of CTC’s bid, neither
9 CTC’s nor Holliday’s final, complete bids were included. Holliday stated that the bids,
which were part of the County’s underlying decision, should be made a part of the record so
that the circuit court could consider “all of the information – in its entirety – that was before
the County when it reached its decision to award the contract for the project to CTC.” The
County filed a response to Holliday’s motion to amend the appeal record on February 2,
2021. The County argued that Holliday provided no valid reason for why its motion should
be granted and that the granting of the motion would only cause delay and expense in the
case.
¶20. The circuit court granted Holliday’s request for a stay on February 2, 2021.
¶21. On February 4, 2021, the County filed a brief in support of its decision to award the
contract to CTC. The County argued that the MSBOC’s January 13, 2021 opinion, which
was attached to Holliday’s memorandum, was not binding legal authority because, unlike the
Attorney General, the MSBOC did not have statutory authority to issue an opinion. In
addition, the County stated that it had evaluated the work to be completed under MSBOC
Rule 5 and the MSBOC order discussed in Clancy’s Lawn Care & Landscaping Inc. v.
Mississippi State Board of Contractors, 707 So. 2d 1080, 1084 (¶¶14-15) (Miss. 1997),7 and
determined that a certificate of responsibility was not required. Holliday countered with a
reply brief in support of its “complaint” and appeal on February 17, 2021. Holliday argued
that the MSBOC was duly authorized to issue opinions concerning whether a contractor must
7 That case, which held MSBOC opinions are binding on parties when requested, also references MSBOC Rule 5, which provides a formula whereby cities and counties can assess their projects and determine the need for a certificate of responsibility. Clancy, 707 So. 2d at 1084 (¶¶14-15).
10 be licensed in order to perform certain work. Holliday also argued that the County had
misinterpreted Clancy.
G. The Circuit Court’s February 23, 2021 Orders
¶22. On February 23, 2021 the court issued two orders. In one order, the circuit court
granted Holliday’s motion to amend or supplement the appeal record. The court directed the
County to supplement the record with the final, complete bids submitted by Holliday and
CTC in addition to the complete record of any actions taken and issues considered on
remand. In its second order, titled “Order Of Remand Jurisdiction Retained,” the circuit
court remanded the matter to the County to either consider the MSBOC’s January 13, 2021
opinion (provided in response to Holliday’s request) or provide all relevant information
regarding the RFP to the MSBOC to obtain an official opinion as to whether a certificate of
responsibility was required. The court also stated that its February 2, 2021 order, which
granted stay of performance on the contract, was to remain in full force and effect.
¶23. Thereafter, the County decided to request an opinion from the MSBOC and did so on
March 2, 2021. However, the County was told that it would not receive a response until mid-
April. Desiring not to lose any more time, and in the event that the MSBOC deviated from
its order approved in Clancy (therefore requiring a certificate of responsibility in this
instance), and because the County did not want to face this issue in the future, the County
decided to advertise for hurricane clean-up on a long-term contract when and as needed. The
County issued a new RFP requiring a certificate of responsibility for this contract and
received eight bids, including one from Holliday. However, the County found, as outlined
in its April 20, 2021 Resolution, that the lowest and best bid was submitted by AAA General
11 Contractors Inc. (AAA). Because the County knew it needed the court’s approval of these
actions because a stay was in place, there was no contract immediately executed with AAA.
It should be noted that Holliday never sought to enjoin this new bidding procedure or bring
it to the attention of the court. Instead, Holliday participated in the re-bidding for the new
project.
¶24. The MSBOC responded to the County in an opinion letter dated April 14, 2021. The
MSBOC stated that it had established specialty classifications such as “clearing, grubbing
and snagging,” “excavation, grading and drainage,” or “landscaping, grading and
beautification” as classifications that cover much of the work described in the request and/or
project specifications. Work under these specialty classifications met the definition of
contractor and therefore required a certificate of responsibility. The MSBOC determined that
storm debris removal, specifically hurricane debris removal involving the use of mechanized
equipment other than human labor, met the definition of “contractor” and therefore required
a certificate of responsibility when the contract exceeded $50,000 pursuant to Mississippi
Code Annotated section 31-3-1.
¶25. In response to the MSBOC opinion letter, the County met on April 19, 2021, and
terminated its contract with CTC. The County then awarded the contract to AAA, subject
to the circuit court’s approval. On April 20, 2021, the County reported these developments
to the circuit court and attached a resolution summarizing them. The County informed the
court that its consultant who was familiar with FEMA regulations was concerned that if the
court determined that the CTC contract was illegal, then FEMA would not reimburse the
County for the work done by CTC, and the county would have to pay the full amount owed.
12 The County also pointed out that most of the governmental entities on the coast did not
require a certificate of responsibility for contractors doing similar work because MEMA did
not require it. The County feared that if the court ruled that the contract with CTC was
illegal, then all the other counties might then be responsible for paying back the funds that
FEMA had paid to them. The County also requested that the circuit court lift the stay that
had stopped the debris removal in the county.
¶26. On April 26, 2021, Holliday filed a response in opposition to the County’s report and
a motion for partial summary judgment. In the response, Holliday argued that the circuit
court had no authority under Mississippi Code Annotated section 11-51-75 (Rev. 2019)8 to
grant the County’s request to hire AAA, a new separate contractor. Holliday argued that the
court was obligated to either affirm or reverse the County’s original decision. Holliday
further argued that it was entitled to an award of the remaining unfinished, incomplete
original RFP work as well as lost profits on the work CTC had performed instead of
Holliday. In the event that the court granted the County’s request to award a new long-term
contract to AAA, Holliday contended that it was entitled to an award of compensatory and
8 Section 11-51-75(d) states:
The circuit court, as an appellate court, either in term time or in vacation, shall hear and determine the same on the record and shall affirm or reverse the judgment. The circuit court shall enter an order establishing a briefing schedule and a hearing date, if any, for the parties to appear and present oral argument. If the judgment is reversed, the circuit court shall render such judgment or decision as the board of supervisors or the governing authority of the municipality ought to have rendered, and certify the same to the board of supervisors or the governing authority of the municipality. Costs shall be awarded as in other cases.
13 consequential damages on the work completed by CTC and the unfinished portion of the
original RFP work.
H. The Circuit Court’s April 30, 2021 Order
¶27. On April 30, 2021, the circuit court entered an order affirming the County’s
termination of the contract with CTC. After reviewing the original RFP and the MSBOC’s
opinions, the court stated that based on the nature of the work and the amount of the contract,
CTC was, in fact, required to have a certificate of responsibility. Therefore, the court found
that the contract between the County and CTC was null and void. The court also stated that
all other actions that had been taken by the County, as reported in its April 20, 2021
Resolution, other than considering whether or not the certificate of responsibility was
required, exceeded the court’s remand order and thereby voided any proposed contract with
AAA. The court directed the County to consider all other proposals received by December
4, 2020, for the original RFP, and to make a finding accepting or rejecting the previously
submitted bids. The findings and actions of the board of supervisors were to be submitted
to the circuit court for review. Thereafter, should the County decide to reject all the
December 4, 2020 bids, the court stated that the County would then have the authority to re-
open the bidding process for the same services or make a determination that a different
service contract was necessary to serve the best interest of the county.
¶28. On May 7, 2021, the County filed a report in response to the circuit court’s April 30,
2021. The County attached a resolution to the report also dated May 7, 2021, detailing the
actions that had been taken pursuant to the court’s order. In its resolution, the County stated
that the board of supervisors had reviewed all the December 4 bids, debated and discussed
14 what the circuit court’s order required, and spent more than three hours on the subject.9 The
County recognized that a certificate of responsibility was required which had not been
required in the original RFP. The County reported that it planned to reject all proposals and
re-advertise for proposals from contractors who obtained a certificate of responsibility
number. The County also stated that due to time and cost restraints, it was restricting the
remaining Hurricane Zeta work to be done to tasks that were absolutely necessary, and
therefore amended the new request for proposals accordingly.
I. The Circuit Court’s Final Order and Judgment
¶29. On May 18, 2021, the court entered its final order and judgment. The court stated that
although contracting with CTC, a contractor without a certificate of responsibility, was in
violation of the law, the action of the Board was not arbitrary and capricious but instead
based upon a mistaken reliance on the Clancy decision. The court also stated it nor the
County was required to award the contract to the next lowest bidder. Instead, the court stated
that it was permitted to award the contract to the next lowest bidder or order the County to
reject all bids and rebid the project. Considering the fact that the County reserved the right
to reject all bids, the significant difference in the monetary amount between CTC and
Holliday’s bids,10 and the entry of the stay order, the court found that all the bids should have
9 In the resolution, the County did not submit the specifics of its discussions. 10 The court stated that Holliday’s bid was $665,437 higher than CTC’s bid. Holliday contends that if CTC had used the correct bid forms, CTC’s bid amount would have been $2,121,863 instead of the reported amount of $1,686,613, which the court relied on. However, even if we look to CTC’s corrected bid amount, Holliday’s bid was still $230,187 higher than CTC’s bid amount.
15 been rejected. The court therefore affirmed the County’s May 7, 2021 resolution rejecting
all the bids and instructed the County to rebid for the unfinished hurricane debris pickup and
removal. The court denied all other requests for relief.
¶30. Holliday now appeals arguing that the circuit court’s decision not to award
compensatory damages was not based on substantial evidence and that the circuit court
should have held a hearing to determine Holliday’s compensatory damages.
STANDARD OF REVIEW
¶31. The Mississippi Supreme Court reviews a decision by a chancery or circuit court
concerning an agency or board action by applying the same standard of review that the lower
courts are bound to follow. Miss. Sierra Club Inc. v. Miss. Dep’t of Envtl. Quality, 819 So.
2d 515, 519 (¶15) (Miss. 2002); see also Hooks v. George County, 748 So. 2d 678, 680 (¶10)
(Miss. 1999). “Our review of a decision by a county board of supervisors is limited.”
Preferred Transp. Co. LLC v. Claiborne Cnty. Bd. of Supervisors, 32 So. 3d 549, 551 (¶5)
(Miss. Ct. App. 2010). “We will not set aside the action of the governing body of a
municipality unless such action is clearly shown to be arbitrary, capricious, or discriminatory
or is illegal or without substantial evidentiary basis.” Id. “An act is arbitrary and capricious
when it is done at pleasure, without reasoned judgment or with disregard for the surrounding
facts and circumstances.” Precision Commc’ns Inc. v. Hinds County, 74 So. 3d 366, 369 (¶9)
(Miss. Ct. App. 2011). “Substantial evidence is such relevant evidence as reasonable minds
might accept as adequate to support a conclusion or more than a mere scintilla of evidence.”
Id.
DISCUSSION
16 ¶32. Holliday argues that it is entitled to compensatory damages. However, we must first
decide whether the County acted in a manner that was arbitrary, capricious or illegal, thus
exposing it to liability when it awarded the original contract to CTC.
I. Whether the County’s award of the original contract to CTC was arbitrary and capricious.
¶33. Holliday argues that the County’s original award of the contract to CTC was arbitrary
and capricious because CTC did not hold a certificate of responsibility. Under Mississippi
law, “[a]n act is arbitrary and capricious when it is done at pleasure, without reasoned
judgment or with disregard for the surrounding facts and circumstances.” Id. In response,
the County stated that it relied on the MSBOC order in Clancy, a Mississippi Supreme Court
case, to determine that a certificate of responsibility was not needed to perform the work
outlined in the RFP.
¶34. In Clancy, 707 So. 2d at 1081 (¶4), the City of Ocean Springs, Mississippi issued an
RFP for landscape and maintenance work to be done along U.S. Highway 90. Id. “The
scope of the work described by the RFP was to provide pruning, mulching, weeding,
fertilizing, insecticide and fungicide treatment, plant replacement, mowing, trimming and
litter removal.” Id. In response to the advertisement, Clancy submitted a bid of $120,000,
and Your Personal Gardener (YPG) submitted a bid of $57,000. Id. at (¶5). Clancy had a
certificate of responsibility issued by the MSBOC, but YPG did not. Id. The City decided
to award the contract to YPG based on a prior MSBOC opinion determining “that no
certificate of responsibility was required to do mowing or litter removal.” Id. at (¶6).
¶35. In response, Clancy filed an injunction lawsuit against the city and YPG, but the
17 lawsuit was “dismissed after all parties agreed to attend the quarterly meeting of the
[MSBOC] to seek a clarification of the board’s previous ruling . . . concluding that mowing
and litter removal did not require a certificate of responsibility.” Id. at 1081-82 (¶6). At the
meeting, the MSBOC “concluded . . . that work under the classification of Grounds
Maintenance [met] the definition of ‘contractor’ in Miss[issippi] Code Ann[otated] [section]
31-3-1 and therefore required a certificate of responsibility issued by the [MSBOC] . . . .”
Id. at 1082 (¶6). The MSBOC also entered an order stating,
[U]nder Rule 5 of the Rules and Regulations of the Board (1) the awarding agency must make a determination of which classification of work covers at least 50% of the total cost of the project; (2) if at least 50% of the total cost of the project constitutes ground maintenance, then a certificate of responsibility is needed; and (3) if at least 50% of the total cost of the project constitutes mowing and/or litter removal, then a certificate of responsibility is not needed.
Id. at (¶7).
¶36. Clancy then appealed from the MSBOC’s order to the Jackson County Chancery
Court. Id. at (¶8). The chancery court held that “the action taken by [the MSBOC] was
supported by substantial evidence, was not arbitrary [or] capricious, was within the power
of the Board [of Contractors] to make, and did not violate any statutory or constitutional right
of Clancy’s.” Id. The chancery court also held that the MSBOC was “within their authority
to conclude that mowing and/or litter removal did not require a certificate of responsibility.”
¶37. Clancy appealed the chancery court’s ruling to the Mississippi Supreme Court arguing
that the MSBOC “did not have the authority to determine that mowing and/or litter removal
did not require a bidder to have a current certificate of responsibility.” Id. at 1083 (¶10).
18 The supreme court held that because Mississippi Code Annotated 31-3-13 expressly grants
the MSBOC with the “authority to set forth the requirements for a certificate of responsibility
and [the authority] to classify the kind of works that a contractor can perform under its
certificate of responsibility, then it [was] “necessarily implied,” and a “logical necessity,” that
the board also have the authority to determine what types of work require a contractor to
obtain a certificate of responsibility. Id. at 1084 (¶15). The supreme court also reviewed and
approved the order issued by the MSBOC regarding Rule 5 of the MSBOC Rules and
Regulations. In summary, Clancy held two things: first, it approved MSBOC Rule 5 that
instructed local authorities on how they could determine when a certificate of responsibility
was required for a project; and second, when consulted, the MSBOC did have the authority
to determine when a certificate of responsibility was needed based on the specifications of
the project presented.
¶38. In the present case, Holliday submitted its protest, in which it asserted that a certificate
of responsibility was required to complete certain work included in the RFP. The County
met and evaluated the work to be done under the contract based on Clancy and Rule 5 of the
Rules and Regulations of the MSBOC. The County concluded that a certificate of
responsibility was not required to perform the work outlined in the RFP. Based on this
evaluation, the County proceeded with its award of the contract to CTC. At this point,
neither the County nor Holliday had any opinion from the MSBOC.
¶39. In its final order the circuit court held that “while ultimately the original award of the
contract to CTC . . . was in violation of the law, the action of the Board was not arbitrary and
capricious but based upon a mistaken reliance upon the Clancy decision.” We agree. There
19 is no evidence in the record to show that the County’s reliance on Clancy was misplaced.
Clancy is still good law and does give the County the authority to evaluate the work
described in an RFP to determine if a certificate of responsibility is required. Prior to the
execution of the contract with CTC, no MSBOC opinion had been rendered. After the
County received an opinion from the MSBOC, the County took the appropriate action.
Although the County’s assessment that a certificate of responsibility was not required was
later determined by the MSBOC to be incorrect and thus in violation of the law, the County’s
actions were not arbitrary and capricious. Therefore, we affirm the circuit court’s holding
that the County’s initial decision to award the contract to CTC was illegal but not arbitrary
and capricious.
II. Whether Holliday was entitled to compensatory damages for the month of work CTC completed on the contract.
¶40. Although the County’s original contract with CTC was illegal, that determination,
alone, does not entitle Holliday to an award of compensatory damages. Rather, in addition
to that determination being made, Holliday was required to show that the County would have
awarded it the contract had it not awarded the contract to CTC, and that the contract with
CTC was substantially completed, thus precluding Holliday from rebidding on the project.
Holliday has not proven either of these latter elements.
¶41. The Mississippi Supreme Court has held that if a project was not substantially
completed and a determination was made that the contract was illegally awarded, the circuit
court can either decide to (1) award the contract to the next lowest bidder or (2) allow the
County to reject all bids and re-advertise for the project. City of Durant v. Laws Const. Co.,
20 721 So. 2d 598, 600 (¶4) (Miss. 1998). In Durant, the city of Durant “advertised and
published for bidders to construct a 100,000 square foot building.” Durant, 721 So. 2d at
600 (¶5). The City accepted a bid from King Metal Buildings Inc. (King), which failed to
include its certificate of responsibility number on the exterior of its bid envelope as required
by Mississippi Code Annotated section 31-3-21. Id. at 599 (¶2). Laws Construction
Company (Laws) submitted a letter protesting the opening of King’s bid. Id. at 600 (¶7). In
response to Law’s protest, the alderman and mayor for the City held a meeting. Id. at (¶8).
At the meeting, the attorney for the City discussed opinions the Attorney General’s office had
rendered in other cases. Id. According to the city attorney, the opinions advised “that under
the circumstances, the City could legally award the bid to King” although it had failed to
have its certificate of responsibility number listed on its bid envelope. Id. However, a field
representative, who was employed with the MSBOC for seven years, also spoke at the
meeting, and informed the alderman and mayor that “a bid may not be opened without a
certificate of responsibility number located on the exterior of the envelope.” Id. at 601 (¶8).
He further stated that he had always advised public bodies not to open bid envelopes that did
not have the number located on the exterior of the envelope. Id. Despite this admonition of
the MSBOC representative, the board of alderman awarded the project to King. Id. at (¶9).
Laws appealed the City’s award to the Holmes County Circuit Court but, by the time the
appeal was heard, the work on the project was substantially completed. Id. at (¶2).
¶42. The circuit court held that section 31-3-21 clearly required the certificate of
responsibility number on the exterior of the bid envelope and therefore the City had violated
a statutory requirement, and thus its action was illegal. Id. at (¶11). The circuit court further
21 held that the City had erred in considering King’s bid and determined that either Laws would
have been entitled to the contract or the City could have rejected all bids. Id. However,
“[s]ince the project was precluded from being awarded to Laws due to its substantial
completion, the circuit court determined that Laws was entitled to recover damages.” Id. at
605 (¶28). In addition, the circuit court noted that the “City had conceded that it would have
accepted Laws’ bid and awarded Laws the contract . . . if the city had neither opened nor
considered King’s bid.” Id. at 601 (¶11). Therefore, the circuit court awarded Laws a
judgment against the City for compensatory damages and attorneys’ fees, and the City
appealed. Id. The Mississippi Supreme Court affirmed the circuit court’s determination that
the contract was illegally awarded to King, and held that Laws was entitled to damages as
measured by the law of contracts. Id. at 606 (¶34). In summary, Laws was awarded damages
because of the finding that the City had acted illegally, because the work on the project was
substantially completed, and because the City conceded that it would have awarded the
contract to Laws, as the next lowest bidder. Therefore, the supreme court held that the only
relief available to Laws was compensatory damages.
¶43. In this case, however, although the contract was awarded to CTC illegally, the work
on the project was not substantially completed and there was no admission by the County or
determination by the circuit court that Holliday was entitled to the original RFP contract.
Thus, pursuant to Durant, the County had the option of awarding the contract to Holliday or
rejecting all bids and starting anew. Holliday had the opportunity to bid on the new contract,
which included the work remaining from the original contract with CTC, and thus Holliday
is not entitled to damages as was Laws in Durant.
22 ¶44. Holliday incorrectly challenges the authority of the circuit court to order or allow the
County to rebid the project. In fact, this court has twice affirmed a circuit court’s authority
to allow a county to reject all bids and re-advertise for an incomplete project that was
illegally awarded.
¶45. In Preferred, 32 So. 3d at 554 (¶13), Claiborne County requested competitive
proposals for the collection and disposal of solid waste pursuant to Mississippi Code
Annotated section 31-7-13(r) (Rev. 2020),11 and both Preferred Transport Company LLC
(PTC) and HomeBase Litter Control, LLC (HomeBase) submitted sealed proposals. Id. at
550 (¶2). The County awarded the contract to HomeBase although PTC was the lowest
bidder. PTC appealed to Claiborne County Circuit Court arguing that the county’s award of
the contract to HomeBase “was in violation of statutory authority as the bid award was based
on factors not contained in the [RFP].” Id. at 550 (¶1). The circuit court agreed with PTC’s
11 Section 31-7-13(r) states, in pertinent part:
Any request for proposals when issued shall contain terms and conditions relating to price, financial responsibility, technology, legal responsibilities and other relevant factors as are determined by the governing authority or agency to be appropriate for inclusion; all factors determined relevant by the governing authority or agency or required by this paragraph (r) shall be duly included in the advertisement to elicit proposals. After responses to the request for proposals have been duly received, the governing authority or agency shall select the most qualified proposal or proposals on the basis of price, technology and other relevant factors and from such proposals, but not limited to the terms thereof, negotiate and enter into contracts with one or more of the persons or firms submitting proposals. If the governing authority or agency deems none of the proposals to be qualified or otherwise acceptable, the request for proposals process may be reinitiated.
(Emphasis added).
23 claim that the County had exceeded the statutory authority when it considered factors that
were not listed in the RFP. Id. at 551 (¶4). Instead of awarding the contract to PTC, the
circuit court ordered the County to reopen the request for proposal process to include such
factors in the RFP. Id. PTC argued to this court that once the circuit court found that the
award of the contract to HomeBase was invalid, the circuit court had the statutory authority
to award the contract to PTC pursuant to Mississippi Code Annotated section 11-51-75(d),
or, alternatively, to award PTC compensatory damages. Id. PTC cited Durant to support its
contention for an award of compensatory damages. Id. at 554 (¶15). However, this court
held that Durant was distinguishable from PTC’s case because in Durant the contract had
been substantially completed by another vendor, and thus it was impossible to award the
contract to Laws. Id. at (¶15). We also stated that because the contract PTC was disputing
was an ongoing service contract, which could have been renewed upon the award of a new
contract at the closing of the RFP process, an award of compensatory damages was not
warranted. Id. at (¶15). Therefore, we denied PTC damages and specifically found no error
in the circuit court’s order to re-institute the RFP process. Id. at 555 (¶17).
¶46. Similarly, in Precision, 74 So. 3d at 367 (¶1), this court also affirmed the Hinds
County Circuit Court’s decision to allow the Hinds County Board of Supervisors (HCBS) to
reject all previous bids and re-advertise the contract for the installation of early-warning
tornado sirens. In that case, “HCBS published a notice that it was requesting proposals to
replace up to fifty-one broken and/or outdated emergency weather sirens.” Id. at 367 (¶3).
HCBS received seven bids in response to its notice. Id. at (¶4). HCBS held a special
meeting and voted to award the contract to Emergency Dispatch Notification Systems
24 (EDNS). Id. On November 26, 2008, Precision Communications Inc. (PC) appealed to the
circuit court after HCBS awarded the contract to EDNS instead of PC. Id. In its appeal, PC
“requested that the circuit court stay HCBS’ award of the contract to EDNS until after the
circuit court had ruled on PC’s bill of exceptions.” Id. at 368 (¶5). The circuit court denied
PC’s motion, and “HCBS and EDNS entered into a contract for the installation of ten of the
fifty-one weather sirens.” Id.
¶47. On July 28, 2009, HCBS moved to dismiss PC’s appeal, arguing that it was moot
because HCBS had “chosen to rebid the work that [was] the subject of [the] appeal.” Id. at
(¶6). In response, “PC requested that the circuit court stay HCBS’ attempt to rebid the
project.” Id. “[T]he circuit court entered an order denying HCBS’ motion to dismiss PC’s
appeal”, and “imposed a stay of PC’s appeal and remanded the matter to HCBS with
instructions to reconsider the previous bids.” Id. at 368 (¶7). “HCBS provided the circuit
court with a copy of a transcript and executive session minutes regarding its reconsideration
of all previous bids.” Id. The minutes reflected that HCBS had been informed that awarding
the contract to PC could endanger the grant funding for the project because PC had helped
the County secure the funds from the federal government. Id. “HCBS informed the circuit
court that it had voted to reject all of the bids and rebid the award for early warning sirens.”
Id. at 369 (¶7). After being informed of HCBS’s decision, the circuit court “filed [an] order
lifting its stay and dismissing PC’s appeal.” Id. at (¶8). The circuit court stated that “the
County’s ultimate rejection of all bids initially submitted to the County makes moot the
appeal before the court.” Id. PC appealed the circuit court’s decision, and this court, relying
on Preferred, held that because “the circuit court could have ordered HCBS to reject all bids
25 and reopen the request-for-proposals process,” it was appropriate to affirm the circuit court’s
finding that PC’s appeal was moot. Id. at 371 (¶16).
¶48. Therefore, in this case, under the holdings of Preferred and Precision, the circuit court
did not act arbitrarily or capriciously when it allowed the County to reject all bids and re-
advertise after finding that the County had illegally awarded the contract to CTC. It follows
then that the County had the authority to rebid the hurricane debris removal project, and
because Holliday had an opportunity to bid on that work, under our reasoning in Preferred,
no damages were warranted.
¶49. Holliday also cites W.G. Yates & Sons Construction Co. v. City of Waveland, 168 So.
3d 963 (Miss. Ct. App. 2012), in support of its contention that it is entitled to compensatory
damages. However, the Yates decision, with facts similar to those in Durant, actually
supports our holding that Holliday is not entitled to damages in this case.
¶50. In Yates, the City advertised for bids for a sewer project on May 14, 2009. Yates, 168
So. 3d at 964 (¶2). Yates and Sons Construction Company (Yates) submitted a bid for
$9,471,859, and Reynolds Inc. (Reynolds) submitted a bid for $9,356,601. Id. “Reynolds
and Yates submitted the two lowest bids.” Id. at (¶3). The City awarded the contract to
Reynolds, and Yates appealed to the Hancock Circuit Court, arguing that Reynolds, which
was not a resident contractor, had failed to “attach its state’s current law related to the state’s
treatment of non-resident contractors.”12 Id. at 967 (¶14). The City had concluded that
12 Mississippi Code Annotated section 31-3-21(3) provides that “a non-resident contractor shall attach a copy of its state’s current law related to the treatment of non- resident contractors in that state.” Yates, 168 So. 3d at 966 (¶14). This law is meant to ensure equal treatment of non-resident bidders in each state.
26 Reynolds was a resident contractor due to its affiliation with another corporation. Id. at 965
(¶7). On August 8, 2009, Yates requested that the circuit court stay the contract award to
Reynolds, id. at 974 (¶61), but on December 18, 2009, the circuit court denied Yates’s
motion, stating that Yates could seek compensatory damages if the court were wrong. Id. at
(¶62). The circuit court ultimately dismissed Yates’s appeal and affirmed Waveland’s
decision to award the contract to Reynolds, finding that Reynolds was a resident contractor
under Mississippi Code Annotated section 31-3-21(3), and thus was not required to attach
its state’s laws on non-resident bidding. Id. at (¶62).
¶51. On appeal, this Court held that because Reynolds should not have been treated as a
resident contractor, id. at 971 (¶40), the City’s actions had been arbitrary and capricious. Id.
at 971 (¶38). We stated that the City’s decision to award the sewer project to Reynolds was
not supported by substantial evidence because “there [was] no evidence in the record that
Waveland’s governing authority considered or was even aware of whether Reynolds met the
state’s public-bid laws.” Id. at 971 (¶38). With respect to damages, this court found the case
to be similar to and applied Durant. The contract was bid in May 2009, id. at 964 (¶2), and
in August 2009, Yates requested that performance on the contract be stayed. Id. at 974 (¶61).
In December 2009, the circuit court denied Yates request, id. at (¶62), and we rendered our
opinion on July 12, 2012, over two-and-a-half years after the improper contract had been
executed and work on the contract had been performed in the interim. Thus, finding Durant
applicable, we remanded the case for a hearing on whether Yates was entitled to damages.
Id. at 675 (¶¶63-65). In the case at hand, unlike in Yates, CTC had only completed one
month of work on the contract before the court-ordered stay. In addition, Holliday had an
27 opportunity to secure the contract when the County rebid the project, albeit without the
circuit court’s authority, and again Holliday was outbid. Moreover, according to the circuit
court’s final order, the County was allowed to reject all bids and rebid the project, thus giving
Holliday a third opportunity to secure the contract.
¶52. Finally, Holliday has not shown that it was entitled to an award of the original
contract. The County did not concede, as did the City in Durant, that it would have accepted
Holliday’s bid if CTC’s had not been considered. When ordered by the circuit court to
review the original bids received on December 4, the County ultimately chose to reject all
original bids, including Holliday’s, which the circuit court found it had the authority to do.
CONCLUSION
¶53. We affirm the circuit court’s ruling that although the CTC contract was illegal, the
County had not acted arbitrarily and capriciously. We further hold that the circuit court did
not act arbitrarily and capriciously but rather had the authority to allow the County to reject
all bids, re-advertise, and allow companies to re-bid for the hurricane debris removal work.
Finally, because Holliday failed to show that it was entitled to the original award of the
contract, and the work on the project had not been substantially completed, we affirm the
circuit court’s ruling that Holliday was not entitled to compensatory damages.
¶54. AFFIRMED.
BARNES, C.J., GREENLEE, WESTBROOKS, LAWRENCE, McCARTY, SMITH AND EMFINGER, JJ., CONCUR. WILSON, P.J., CONCURS IN PART AND IN THE RESULT WITHOUT SEPARATE WRITTEN OPINION. CARLTON, P.J., CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE WRITTEN OPINION.