Case Title: Robert W. Anderson Housewrecking and Excavating, Inc. v. Board of Trustees, School Dist. No. 25, Fremont County, Wyo.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1984-05-03T00:00:00Z

Document:
Robert W. Anderson Housewrecking and Excavating, Inc. v. Board of Trustees, School Dist. No. 25, Fremont County, Wyo.1984 WY 45681 P.2d 1326Case Number: 83-138, 83-139Decided: 05/03/1984ROBERT W. ANDERSON HOUSEWRECKING AND EXCAVATING, INC., A CORPORATION, APPELLANT (PLAINTIFF),

v.

BOARD OF TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, WYOMING, APPELLEE (DEFENDANT). BOARD OF TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, WYOMING, APPELLANT (DEFENDANT).

v. ROBERT W. ANDERSON HOUSEWRECKING AND EXCAVATING, INC., A CORPORATION, APPELLEE (PLAINTIFF).

Supreme Court of Wyoming
ROBERT W. ANDERSON 
HOUSEWRECKING AND EXCAVATING, INC., A CORPORATION, APPELLANT 
(PLAINTIFF),

v.

BOARD OF TRUSTEES, 
SCHOOL DISTRICT NO. 25, FREMONT COUNTY, WYOMING, APPELLEE (DEFENDANT). BOARD OF 
TRUSTEES, SCHOOL DISTRICT NO. 25, FREMONT COUNTY, WYOMING, APPELLANT 
(DEFENDANT).

v. ROBERT W. ANDERSON 
HOUSEWRECKING AND EXCAVATING, INC., A CORPORATION, APPELLEE 
(PLAINTIFF).

Appeal from the District 
Court, FremontCounty, Robert B. Ranck, 
J.

Joel M. Vincent 
of Hettinger & Leedy, P.C., Riverton, for Board of Trustees, School Dist. No. 
25.

F.M. Andrews, 
Jr. of Andrews & Anderson, P.C., Riverton, for Robert W. Anderson Housewrecking and 
Excavating, Inc.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and 
CARDINE, JJ.

CARDINE, 
Justice.

[¶1.]     This is an appeal from 
a judgment awarding damages for breach of contract to Robert W. Anderson 
Housewrecking and Excavating, Inc. in the amount of $22,540 against School 
District No. 25, Fremont 
County, Wyoming. The 
school district appealed from the judgment and Anderson cross-appealed on the issue of 
damages. We will modify the judgment as to the amount of damages awarded and 
affirm the judgment as modified.

[¶2.]     Appellant raises two 
issues on appeal.

"I. Whether the trial 
court's entry of judgment in favor of the plaintiff in the sum of $22,540.00 
violates that rule of law that a public body may not be bound to a contract, 
implied from the actions or statements of its agents or 
officers.

"II. Whether the trial 
court's holding violates § 21-3-105, W.S. 1977."

Appellee 
disagrees with the statement of the issues and rephrases it 
as:

"The issue in this case 
is not whether there was an implied contract created by the conduct of the 
agents or employees of the School District, but whether the School Board, by 
accepting an offer at a public bid letting, and communicating that acceptance to 
the Appellee Anderson, created a contract which could not later be revoked or 
rescinded."

Appellee also 
cross-appeals raising the issue of:

"* * * [W]hether the 
lower Court committed error in awarding damages of $22,540.00 to the Appellant 
Anderson, in view of the uncontroverted evidence of loss of profits of 
$98,173.75, and whether the Appellate Court should modify the Judgment to 
reflect the Appellant's true damages."

[¶3.]     On July 15, 1981, the 
Board of Trustees of School District No. 25, Fremont 
County, Wyoming approved for 
publication the notice of an invitation to bid upon the demolition of the old 
RivertonHigh School. On August 11, 
1981, the bids were opened. The low bidder was Gillingham Construction Company, 
Inc. of Boise, Idaho and the next low bidder was Robert W. Anderson 
Housewrecking and Excavating, Inc., appellee. Between the time the bids were 
opened and the next formal meeting of the school board, Mr. Snell, the business 
manager, received a call from Gillingham Construction advising they would 
withdraw their bid because of inability to obtain liability insurance in the 
State of Wyoming. Appellee, Mr. Anderson, was informed 
by Mr. Snell that the school district was going to accept his bid for the 
demolition of the school.

[¶4.]     The next formal school 
board meeting was held on August 18, 1981. At that time the board, under the 
advice of their attorney, officially accepted the bid of Gillingham Construction 
Company. They then moved that the board accept the withdrawal of the bid of 
Gillingham Construction Company.1

[¶5.]     The Board then voted to 
accept the bid of the second low bidder, Anderson, for the demolition of the 
RivertonHigh School. At that time a 
citizens group appealed to the board to save the high school 
building.

[¶6.]     Anderson was then told 
that his bid had been accepted effective September 2, 1981, unless the citizens 
group developed another worthwhile use and plan to save the high school. No 
other use or plan to save the school was developed.

[¶7.]     On September 8, 1981, 
Gillingham informed the board that his insurance company had now been certified 
to do business in Wyoming and that his original bid would remain 
open until September 17-18, 1981. At the regularly convened meeting of September 
15, 1981, the board, by resolution, accepted the bid of Gillingham. The contract was signed with Gillingham 
September 22, 1981; on that same date, Snell informed Anderson that there had 
been new arrangements relative to tearing down the school and that the contract 
had been given to Gillingham. Anderson filed suit.

[¶8.]     Trial was to the court; 
and, at the conclusion, judgment was entered for appellee Anderson in the amount of 
$22,540.

I

[¶9.]     Appellant raises the 
issue of whether a public body may be bound to an implied contract and whether § 
21-3-105, W.S. 1977,2 was violated. Appellee contends 
that the issue is not whether there was an implied contract, but whether there 
was an express contract which was breached by the school board. These arguments 
are interrelated and, therefore, will be discussed 
together.

[¶10.]  Appellant contends that a municipal 
corporation cannot be bound by a contract which is made by its officers if the 
agent had no authority to enter into a contract. Twitchell v. Bowman, Wyo., 440 P.2d 513 
(1968). The members of a board cannot act as individuals to bind an agency 
because the board must act as a body to validly act for and obligate the agency 
by an express contract. George W. Condon 
Co. v. Board of CountyCom'rs of NatronaCounty, 56 Wyo. 38, 103 P.2d 401 (1940). Persons who deal 
with school districts are charged with a duty of ascertaining that the person 
with whom they are dealing possesses legal authority to bind the school 
district. Porta House, Inc. v. Scottsdale 
Auto Lease, Inc., 120 Ariz. 115, 584 P.2d 579 (1978). The general 
rule is that a municipal corporation is not bound by a contract which is made in 
its name by one of its officers or a person in its employ if the officer or 
employee had no authority. 56 Am.Jur.2d Municipal Corporations § 504. Where a 
municipal contract is void because it is opposed to a mandatory statute, no 
contract or benefit can be implied. A public body cannot do indirectly what it 
is without power to do directly. Town of 
Worland v. Odell & Johnson, 79 Wyo. 1, 329 P.2d 797 (1958); Kurz v. City of Sheridan, Wyo., 489 P.2d 621 (1971). A school board 
cannot act outside of its statutory authority. School District No. 69 of Maricopa Cty. v. 
Altherr, 10 Ariz. App. 333, 458 P.2d 537 (1969). A person 
is charged with the notice of the limitations of a school district in its power 
to contract. Sibert v. Community College of Flathead Cty., 179 Mont. 188, 587 P.2d 26 
(1978).

[¶11.]  Several of the cases cited by appellant 
as authority are easily distinguished from the present situation. There is no 
allegation in this case that the school board was acting outside of its 
statutory authority, nor that it was without power to enter into this type of 
contract. We note that on occasions, courts will find an implied contract in 
situations where the actual authority of the public agent was defective if the 
contract was one within the authority of the public agency. Barendregt v. Walla Walla School Dist. No. 
140, 26 Wn. App. 246, 611 P.2d 1385 (1980). However, we do not feel it 
necessary to resolve the question of whether or not a public agency can be bound 
by an implied contract because, after a careful review of the record, we find an 
express contract was created.

[¶12.]  There is not a conflict in the facts, but 
there is a conflict in the interpretation of the facts as to whether they 
constituted a contract. We must

"* * * give to the 
evidence of the successful party every favorable inference which may be 
reasonably and fairly drawn from it. * * *" Crockett v. Lowther, Wyo., 
549 P.2d 303, 308 (1976).

We also give 
deference to the findings of the trial judge because,

"* * * where the 
existence and not the validity or construction of a contract or the terms 
thereof is the point in issue, and the evidence is conflicting or admits of more 
than one inference, it is for the jury or other trier of the facts to determine 
whether the contract did in fact exist * * *." 17A C.J.S. Contracts § 
611.

Therefore, using 
these standards, we look to the applicable law of contracts and the record to 
analyze whether an express contract was created.

[¶13.]  Whether a contract has been entered into 
depends upon the intent of the parties and is a question of fact. Prince Enterprises, Inc. v. Griffith Oil 
Co., Inc., 8 Kan. App. 2d 644, 664 P.2d 877 (1983). A 
contract assumes the meeting of minds and an agreement on a thing to be done. Crockett v. Lowther, supra. See Cave 
Construction, Inc. v. United 
States, 387 F.2d 760 (10th Cir. 1967). A 
municipal corporation is bound by its contracts to the same extent as a natural 
person would be, provided that the contract is one it could legally make. The 
Law of Municipal Corporations, 5 McQuillin § 19.39 (1981).

[¶14.]  The legal requirements regarding the 
school district's actions are set forth in § 21-3-105, W.S. 1977, supra fn. 2. 
Therefore, we must decide (1) if there was a legally convened meeting of the 
school board; (2) if the resolution passed by the board acted as an acceptance 
of Anderson's bid offer; (3) if an oral contract would bind the school district; 
and (4) if these questions are answered in the affirmative, does the board have 
discretion to withdraw its acceptance.

[¶15.]  At the August 18, 1981 school board 
meeting, the board discussed the demolition of the high school building.3 Resolution 322 was proposed at the 
meeting of August 18, 1981. At that time a citizens group addressed the board 
with an appeal to save the old high school building and motion 322 was 
withdrawn. Motion 323 was proposed and passed. Resolution 323 stated 
that:

"323 Moved by Mr. Tippets 
that in view of the fact that Gillingham Construction is unable to honor their 
commitment to demolish the old high school building, that the board award the 
bid to Mr. Bob Anderson of Denver, CO, base bid of $93,220.00 and alternate # 1 
bid of $19,480.00 with a completion time of 30 days, but that the bid not be 
awarded until the 2nd day of September, 1981, in order that the patrons of this 
School District may have time to check into another worthwhile use for this 
structure. Seconded by Pat Ferris. Motion carried."

[¶16.]  This resolution was passed at a legally 
convened meeting of the board. It was passed by a majority of the school board, 
and there was a quorum present at the time.

[¶17.]  However, this contract was not to have an 
immediate effect. Therefore, we must determine whether the bid was accepted 
creating a binding contract subject to a condition precedent or whether the 
resolution acted only as an agreement to make a contract in the future. A 
condition precedent "is an act or event, other than a lapse of time, which must 
exist or occur before a duty of immediate performance of a promise arises." The 
Law of Contracts, Calamari & Perillo § 11-3 (1977). A condition precedent 
must be performed before an agreement shall become a binding contract. A 
condition precedent can relate to the formation of a contract. 17A C.J.S. 
Contracts § 338. This award was tentative only in the sense that the demolition 
of the building was a prerequisite to the finality of the award and when this 
contingency occurred, the board was as effectively bound as if signed legal 
documents had been delivered. See, McIntosh Road Materials Co. v. Woolworth, 
365 Pa. 
190, 74 A.2d 384 (1950).

[¶18.]  We do not find a problem with the fact 
that this contract was created orally. State contracts need not be in writing in 
order to be binding unless there is a statutory requirement. 81A C.J.S. States § 
158. An agreement to make a written contract where the terms are mutually 
understood and agreed on in all respects is as binding as the written contract 
would be if it had been executed. When minds have met and terms have been agreed 
on, then the agreement is obligatory. There is nothing left for the future. The 
negotiations are over. 17 C.J.S. Contracts § 49. If there were a statutory 
requirement for a written contract, then the board would not be bound to a 
contract created through resolution. Schull Construction Co. v. Board of Regeants 
of Education, 79 S.D. 487, 113 N.W.2d 663, 3 A.L.R.2d 857 (1962). But where 
neither the requests for bids nor the bid forms designated the manner in which 
the bids could be accepted, an oral acceptance communicated to the offeror is 
legally sufficient to establish a binding contract. Allied Contract Buyers v. Lucero Contracting 
Co., 13 Ariz. App. 315, 476 P.2d 521 (1970). When a 
city council has passed a resolution awarding a contract, the contract is 
complete and, absent fraud, mutual mistake or other grounds for rescission, the 
city is without power to rescind. City of 
Susanville v. 
Lee C. Hess Co., 45 Cal. 2d 684, 290 P.2d 520 (1955). There are no 
allegations in this situation of fraud or mutual mistake.

[¶19.]  The time to exercise discretion is when 
the bids are opened as advertised and the public body makes the award. After 
that decision the body is without further discretion. McIntosh Road Materials Co. v. Woolworth, 
supra. A bid submitted to a public body in response to an ad constitutes an 
irrevocable offer. When that offer is accepted, the board is bound by the 
contract. Elsinore UnionElementary 
School District of RiversideCounty v. Kastorff, 129 Cal. App. 2d 60, 
276 P.2d 112 (1954). See Gurtler, Hebert 
& Co. v. OrleansParishSchool 
Board, La. 
App., 251 So. 2d 51 (1971).

[¶20.]  Therefore, we find that the resolution 
created a binding contract with Robert W. Anderson Housewrecking and Excavating, 
Inc. as soon as Anderson had notice of the award. Notice was 
communicated to Anderson by Mr. Snell on August 19. This 
contract was created with a condition precedent which was that if the citizens 
group had been able to find alternate solutions for the high school, the school 
board would not be bound by the contract with Robert W. Anderson Housewrecking 
and Excavating, Inc. However, this event did not occur. Therefore, the school 
board was bound by its contract with Robert W. Anderson Housewrecking and 
Excavating, Inc.; it did not have discretion to revoke by awarding the contract 
to demolish the building to Gillingham; and the attempted revocation by the 
school district was a breach of the Anderson contract.

[¶21.]  Appellee argues that we should apply 
estoppel against the school board because of misrepresentation and reliance; 
however, it is unnecessary to reach that question since we have found there was 
an express contract which was breached.

II

[¶22.]  Whether the amount of damages was 
correctly calculated.

[¶23.]  Appellee has cross-appealed contending 
that the amount of damage of $22,540 was not supported by the evidence. Mr. 
Anderson's accountant testified that the net profit on specific other jobs 
ranged from a profit of 61.94% to 74%. She testified that Anderson's average net 
profit on jobs was between 62% and 64 1/2%. Anderson contends that this testimony was not 
attacked on cross-examination nor was it rebutted by the school district in its 
case in chief. Testimony was elicited, however, from Anderson upon 
cross-examination that the gross sales from March of 1981 to March 1982 were 
$475,490.10 with a net profit of $125,350.18, which would have created a yearly 
profit of 26%.

[¶24.]  Appellee, in this issue, contends that 
the trial court erred in not allowing it damages of at least 62% of the bid. It 
is apparent from the record that the trial court was not convinced by this 
evidence. It seems obvious that the damages awarded were based upon the average 
26% profit shown in a previous year. This amount, $29,302, was the lowest amount 
that could be awarded upon the evidence adduced. The court, however, awarded 
$22,540 as damages rather than 26% of the bid or $29,302. In Douglas Reservoirs Water Users Ass'n v. 
Cross, Wyo., 569 P.2d 1280 (1977), the findings of 
fact with respect to damages did not contain an itemization of the various 
damages. Our difficulty with the case was not whether there were damages but 
with the court's ultimate determination of the amount of damages. Since the 
trial judge did not explain why the amount was reduced, nor did the record 
reflect a reason, we remanded with directions to vacate the judgment and enter 
judgment in favor of the plaintiff for a modified sum. 

[¶25.]  We are in accord with Montana that in 
situations where the judgment does not result from passion or prejudice and any 
error may be ascertained by mathematical calculations, the supreme court may 
modify without reversing. Zook Brothers 
Const. Co. v. State, 171 Mont. 64, 556 P.2d 911 (1976). See Bohrer v. Clark, 180 Mont. 233, 590 P.2d 117 
(1978).

[¶26.]  Damages for breach of contract are 
calculated to put the plaintiff in the same position as if the contract had been 
performed, less proper deductions. The damages should compensate for the loss 
which would have been prevented by a full performance of the contract. Reynolds v. Tice, Wyo., 595 P.2d 1318 (1979); Zitterkopf v. Roussalis, Wyo., 
546 P.2d 436 (1976). Therefore, we affirm as to the breach of contract and 
remand with directions to vacate the award of $22,540 and enter judgment in 
favor of the plaintiff for the sum of $29,302.

FOOTNOTES

1 The minutes of the 
school board meeting of August 18, 1981, contain the 
following:

"BUILDING REMOVAL, OLD 
H.S.

"Mr. Snell explained that 
Gillingham Construction of Boise, Idaho was the low bidder for the demolition of 
the old high school, $47,000 plus $15,200 for alternate # 1 to fill in and level 
off the site. After the bids were discussed by the board and a decision reached 
to accept this bid, Mr. Snell received a call from Gillingham Construction 
stating that they wished to withdraw their bid due to the fact that they were 
unable to obtain liability insurance in the State of Wyoming. Liability 
insurance had been stipulated as a requirement in the bid 
specifications.

* * * * * 
*

"Mr. Leedy, the 
district's attorney, advised the board to officially act to accept the bid of 
Gillingham Construction and then Mr. Leedy could advise Mr. Gillingham that due 
to their refusal to accept the job, his bid bond would be 
forfeited.

"320 Moved by Dennis 
Tippets that the board accept the bid of Gillingham Construction Co. of Boise, 
Idaho to demolish the old RivertonHigh School with a base bid of $47,000 and 
an alternate # 1 bid of $15,200.00, work to be completed by October 1, 1981. 
Seconded by Craig Tolman. Motion carried.

"Mr. Snell read the 
letter of refusal received from Gillingham Construction 
Co.

"Mr. Tippets stated that 
the Assistant Superintendent in Charge of Business Affairs had received a letter 
from Gillingham Construction Co. in which Mr. Gillingham requested that he be 
allowed to withdraw his bid and requested return of his bid security, the reason 
being that he could not obtain insurance since his company is not licensed to do 
business in the State of Wyoming.

"321 Moved by Dennis 
Tippets that the board accept the withdrawal of the bid of Gillingham 
Construction Company for the demolition of the old high school building but not 
refund the bid security. Seconded by Albert Schultz.

* * * * * 
*

"Motion # 321 
carried."

2 Section 21-3-105, W.S. 
1977, provides:

"The board of trustees of 
a school district shall be the governing body of the school district. A majority 
of the number of members of the board of trustees shall constitute a quorum for 
the transaction of business at any meeting of the board of trustees. No action 
of the board of trustees shall be valid unless such action shall receive the 
approval of a majority of the members elected to the board of 
trustees."

3 The minutes of the 
school board meeting of August 18, 1981, reflect the following regarding the 
acceptance of Anderson's bid:

"322 Moved by Dennis 
Tippets, that in view of Gillingham Construction's unwillingness to accept the 
contract to demolish the old Riverton High School, he would recommend that the 
second low bidder, Bob Anderson of Denver, CO, be accepted in the amount of 
$93,220.00 with an alternate of $19,480.00, for the demolition of the old 
Riverton High School. Mr. Anderson requested 30 days in which to complete this 
task. Seconded by Craig Tolman.

"At this time Tonia 
Burnett addressed the board with an appeal to save the Old High School Building. 
Mr. Carroll stated that the building had been stripped by the district in 
preparation for demolition, that the board had been working on this project for 
the last 4 months, and that it would take a great deal of money to put it in 
usable condition, having been condemned by the State Fire Marshal some years 
ago.

"Mr. Youtz stated that a 
`Citizens Committee' had spent considerable time going over the building 
considering all of the possibilities before making the recommendation that the 
board construct a new high school. Mr. Youtz also stated that it is possible 
that the district would need this area for future expansion and since it is a 
school campus, the building directly to the east being used for classes, the 
district would be a little bit particular as to what the old building was used 
for. There is also a time line in letting the bids that have been received. 
Holding up on bid letting at this time may pose a legal problem for the district 
and make it difficult to obtain bids at a later date if such a request might 
need to be made.

"Mr. Tippets withdrew 
motion # 322."