Orion Portfolio Services 2, LLC v. County of Clark Ex Rel. University Medical Center

245 P.3d 527, 126 Nev. 397, 126 Nev. Adv. Rep. 39, 2010 Nev. LEXIS 44
CourtNevada Supreme Court
DecidedOctober 14, 2010
Docket53969
StatusPublished
Cited by39 cases

This text of 245 P.3d 527 (Orion Portfolio Services 2, LLC v. County of Clark Ex Rel. University Medical Center) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orion Portfolio Services 2, LLC v. County of Clark Ex Rel. University Medical Center, 245 P.3d 527, 126 Nev. 397, 126 Nev. Adv. Rep. 39, 2010 Nev. LEXIS 44 (Neb. 2010).

Opinion

*399 OPINION

By the Court,

Douglas, J.:

The United States District Court for the District of Nevada has certified two questions to this court, pursuant to NRAP 5. Although we accept the federal court’s certified questions, we re-frame them to better reflect the factual circumstances of the federal case and, accordingly, answer the following questions. When a local government entity sells property using the competitive bidding process, does NRS 332.185 require the government to follow public bidding rules outlined in Chapter 332? And, under Nevada law, is a contract obtained through competitive bidding void when it materially differs from the contents of the invitation to bid?

We conclude that the answer to both questions is yes. If a public entity chooses to sell property by competitive bidding, it must follow the rules set forth in NRS Chapter 332. And a contract obtained through competitive bidding is void if it materially differs from the contents of the invitation to bid.

PROCEDURAL HISTORY AND FACTS

Respondent County of Clark ex rel. University Medical Center of Southern Nevada (UMC) decided to sell certain consumer health care accounts through competitive bidding by extending an invitation to bid, which was published in a newspaper. 1 The invitation included a provision that if UMC determined not to sell an ac *400 count that it initially intended to sell, UMC could substitute that account with an account of equal value. Thereafter, UMC issued an addendum to its bid invitation providing that no accounts would be replaced.

Ultimately, UMC accepted appellant Orion Portfolio Services 2’s bid, which Orion made contingent on the parties entering into a purchase agreement for the accounts. The parties subsequently entered into a purchase agreement, which included a provision that allowed the parties to replace certain accounts, notwithstanding UMC’s invitation-to-bid addendum providing that no accounts would be substituted.

After the parties finalized the contract, Orion asked UMC to substitute a number of accounts under the provision in the parties’ agreement purportedly allowing it to do so. When UMC refused to substitute the accounts, Orion instituted a breach of contract action against UMC in the United States District Court.

UMC eventually moved for summary judgment, arguing that the parties’ contract is void because it materially differs from the invitation to bid. Orion opposed the motion and filed a countermotion for summary judgment. In addition to arguing that Nevada law does not void a contract that materially differs from the invitation to bid on which it is based, Orion also argued that Nevada’s statute concerning a government entity’s sale of personal property, NRS 332.185, does not require a government entity to sell personal property using competitive bidding, but rather, gives the government entity discretion to dispose of the personal property “by any manner.” Thus, Orion argued, the requirements of competitive bidding found in NRS Chapter 332 do not apply to UMC’s sale of personal property that is no longer required for public use. Because the parties’ arguments raise questions of Nevada law that have never been addressed by this court, the United States District Court certified two questions, which we have reframed to better reflect the factual situation presented in this case.

DISCUSSION

NRAP 5

This court may answer questions of law certified by a federal court when the “answers may ‘be determinative’ of part of the federal case, there is no controlling [Nevada] precedent, and the answer will help settle important questions of law.’ ’ Volvo Cars of North America v. Ricci, 122 Nev. 746, 751, 137 P.3d 1161, 1164 (2006) (quoting Ventura Group v. Ventura Port Dist., 16 P.3d 717, 719 (Cal. 2001)); NRAP 5.

*401 In this case, the federal district court certified two questions regarding the interpretation of NRS 332.185. 2 The questions asked by the federal district court used the term “public auction”; however, the record in this case indicates that UMC advertised an invitation to bid and acted pursuant to the competitive bidding statutes. Because the instant case involved competitive bidding and not a public auction, we have reframed the federal court’s questions to better reflect the factual circumstances and procedural posture of the case before us. The federal district court also asked, in part, whether a local government entity must follow the public bidding rules set forth in NRS Chapter 333. However, because Chapter 333 concerns the state’s purchasing and selling of property and this case involves the sale of property by a local government, we also limit the questions to whether the government must follow the public bidding rules outlined in NRS Chapter 332, which relates to purchasing and selling by local governments. “In so doing, we point out that, in exercising our discretion to answer certified questions, we nevertheless must constrain ourselves to resolving legal issues presented in the parties’ pleadings.” Terracon Consultants v. Mandalay Resort, 125 Nev. 66, 72, 206 P.3d 81, 85 (2009). After restating the questions, we conclude that the three criteria articulated in Volvo Cars are met. The answers to these two questions will be determinative of the federal case, there is no controlling Nevada precedent, and the answers will help settle important questions of law. Therefore, we answer the certified questions.

We first address whether NRS 332.185 requires the government to strictly adhere to the competitive bidding rules outlined in NRS Chapter 332. We then consider whether a contract obtained through competitive bidding is void if it materially differs from the invitation to bid.

Whether NRS 332.185 requires local governments to dispose of personal property through the competitive bidding process

The first certified question requires this court to determine whether NRS 332.185 requires local governments to use the competitive bidding process outlined in NRS Chapter 332 when dis *402

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Bluebook (online)
245 P.3d 527, 126 Nev. 397, 126 Nev. Adv. Rep. 39, 2010 Nev. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orion-portfolio-services-2-llc-v-county-of-clark-ex-rel-university-nev-2010.