Case Title: In re Kuchler, Inc. v. State, Department of Transportation

Citation: 

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2005-10-25T00:00:00Z

Document:
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No, 26897

IN THE SUPREME COURT OF THE STATE OF HAWAI'I

 

 

In the Matter of

PHILLIP G. KUCHLER, INC., Petitioner-Appellant-Appellant,

. gle
STATE OF HAWAI'I, DEPARTMENT OF TRANSPORTATION
Respondent-Appel lee-Appel lee

aaws

  

APPEAL FROM THE FIRST.ciRcUIT court “|
(CIV. NO. 04-1-0872)

00:6 Wy sz 100 st

SUMMARY DISPOSITION ORDER
(By: Moon, C.J., Levinson, Nakayama, and Duffy, JJ.;
with Acoba, J., Concurring Separately)

Petitione:

 

jppellant-appellant Phillip G. Kuchler, Inc.
(Kuchier) appeals from the first cireust court’s September 17,
2004 final judgment! affirming the March 18, 2004 Findings of
Fact, Conclusions of Law and Decision of the Hearings officer,
Office of Administrative Hearings, Department of Commerce and
Consumer Affairs, State of Hawai'i (Hearings Officer) affirming
the July 9, 2003 denial by respondent-appellee-appellee State of
Hawai'i, Department of Transportation (DOT) of Kuchler’s April 4,
2003 bid protest of Dot's decision to cancel its solicitation of
contract bids for the managenent of real property known as
Kepalama Military Reservation (HMR), Project No. HAR-PM-03-1. on

appeal, Kuchler contends that the circuit court erred when it

 

‘The Honorable Sebrina S. Mexent

 

vresided over this matter.
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affirmed the Hearings Officer’s: (1) eréoneous “conclusion that
DOT had unfettered discretion to cancel the solicitation unless
Kuchler demonstrated favoritism, corruption or bad faith on Dot's
part"; (2) clearly erroneous finding that “the solicitation was
validly cancelled on the ground that it ‘did not provide for
consideration of a factor of significance to the agency’ (iste, @
one-month cap or limit on leasing commissions)"; (3) erroneous
conclusion that DOT provided adequate notice of its true reasons
for cancelling the solicitation; and (4) clearly erroneous
finding that “DOT's actions in cancelling the solicitation were
not tainted by favoritism and bad faith.”

upon carefully reviewing the record and the briefs
submitted by the parties, and having given due consideration to

the arguments advocated and the issues raised, we hol

 

(2) An agency does not abuse its discretion where it
complies with applicable law. See, e.a., West Alabama

ity of ition 2

 

Adnin., 302 F. Supp.2d 672, 682 (S.D. Tex. 2004)
(holding that where an agency complies with applicable
law, its decision “cannot be classified as arbitrary,
capricious, or an abuse of discretion”). In the
instant case, DOT complied with applicable law in
cancelling the bid solicitation because the
cancellation was permissible under Hawai'i
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Administrative Rules (HAR) implementing provisions of

 

the Hawai"i Procurement Code governing cancellation of
bid solicitations. See Hawai'i Revised Statutes (HRS)
§ 1030-308 (Supp. 1997) ("An invitation for bids, a
request for proposals, or other solicitation may be
canceled, or any or all bids or proposals may be
rejected in whole or in part as may be specified in the
solicitation, when it is in the best interests of the
governmental body which issued the invitation, request,
or other solicitation, in accordance with rules adopted
by the policy board.”); HAR § 3-122-96(a) (2) (c) (1997)
(a solicitation may be cancelled if it “did not provide
for consideration of all factors of significance to the

agency”

 

(2) The Hearings Officer's finding that the solicitation
did not provide for consideration of a factor of
significance to DOT -- a one-month cap on commission
fees -- is not clearly erroneous because it is
supported by substantial evidence, including the
credible testimony of DOT’s contracting officer. See
Lsslic v. Estate of Tavares, 91 Hawai'i 394, 399, 964
P.2d 1220, 1225 (1999) (appellate court’s scope of
review under the clearly erroneous standard is limited
to (1) determining whether there is substantial

3
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evidence in the record to support the ruling; and (2)
if there is such evidence, determining whether the
record nevertheless leaves the court with the definite
‘and firm conviction that a mistake has been made); In
reDoe, 95 Hawai'i 183, 196-7, 20 P.3d 616, 629-30
(2001) (testimony of one credible witness may
constitute substantial evidence) ;

ons for

 

DOT provided adequate notice of its x
cancelling the solicitation because it provided Kuchler
notice of the actual circumstances and facts leading to
the cancellation of the solicitation. See HRS § 103D-
308 ("reasons [for cancellation of a solicitation]
shall be made part of the contract file”); HAR § 3-122-
96(b) (2) (requiring a “brief explanation of the
reason(s) for cancellation”);

The Hearings Officer's finding that DOT did not act in
bad faith or with favoritism is not clearly erroneous
inasmuch as there is sufficient evidence in the record,
including the credible testimony of DOT's contracting
officer, to support the finding that DOT cancelled the
solicitation in good faith (i.e., because it was
concerned that without @ one-month cap on commission

fees it risked paying more in commissions than it would
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recoup in rent). See Leslie, 91 Hawai'i at 399, 984
P.2d at 1225. Therefore,
IT 18 HEREBY ORDERED that the circuit court's
September 17, 2004 final judgment is affirmed.

DATED: Honolulu, Hawai'i, October 25, 2005.

LOR
Neantees Crore cure
Gene Duceys br

I concur in the result.

ree

on the briefs:

Dennis W. King’
and John Winnicki

(of Deeley King & Pang),
for petitioner-appellant-
appellant Phillip G.
Kuchler, Inc.

Deirdre Marie-tha
and Dorothy D. Sellers
Deputy Attorneys General,
for respondent-appellee
appellee State of Hawai't,
Department of Transportation