Opinion ID: 768691
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 In 1990, the City and two private entities, Midland Equities, Inc. and St. Louis Marketplace Limited Partnership, initiated an effort to redevelop an area of the City along Manchester Avenue occupied by the abandoned Scullin Steel facility. The redevelopment plan called for the construction of the St. Louis Marketplace, a 461,000 square foot retail shopping center funded in part by public monies raised through tax increment financing (TIF). Because of practical and logistical concerns, the project required that Manchester Avenue be widened, which in turn required the relocation of railroad tracks belonging to Missouri Pacific Railroad Company. Relocating the tracks entailed moving 1.2 miles of two mainline railroad tracks, realignment of a railroad bridge, and purchase of some 45 private residences that occupied the new right-of-way. The City's participation in the project was enabled by the Board of Aldermen's (Board) passage of a number of ordinances that approved the formal plan, authorized the City to enter into a redevelopment contract with the private developers, and authorized the issuance of TIF bonds. 3 The details of the agreement were set forth in a 1991 Redevelopment Contract and simultaneous Public Improvements Agreement. Under the Public Improvements Agreement, Missouri Pacific agreed to enable the widening of Manchester Avenue by exchanging its existing right-of-way for the new right-of-way, and by providing the engineering services necessary to design and construct the new tracks. The City agreed to pay the private developers approximately $9.2 million for the existing right-of-way through advances of TIF proceeds. The private developers would pay Missouri Pacific all reasonable costs it incurred in relocating its tracks, as well as some $143,000 representing the difference in value between the existing tracks and the new tracks. 4 The Redevelopment Contract provided, inter alia, that the private developers 5 shall before the commencement of any work in connection with the Substitute Railroad Facility tender for approval to the City proof of ... performance, labor and material payment bonds as are acceptable to and enforceable by the City ... in all cases in such amounts and issued or made by such companies or sureties and in such forms as are acceptable to the City. Any such bond shall name the City as an obligee. Copies of certificates of such insurance or bonds shall be delivered to the City. 6 (App. at 289-90.) The Redevelopment Contract was incorporated by reference in Ordinance No. 62044, an ordinance passed by the Board authorizing the execution of the contract. 7 Missouri Pacific eventually finished the relocation work, and took title to the new right-of-way. The old right-of-way was dedicated to widening Manchester Avenue, and the shopping center project was ultimately completed. However, the private developers failed to pay all of Missouri Pacific's costs in relocating the railroad tracks: the railroad submitted to the private developers invoice statements for its relocation labor and material totaling $2,484,557.13, of which $705,801 has been paid. Neither the City nor the private investors acquired the payment bond contemplated in the contract to ensure that Missouri Pacific would be paid. 8 Missouri Pacific commenced this suit in the district court against the private developers and the City's former mayor, comptroller, and Board members. Missouri Pacific has since merged into Union Pacific, which has become the real party in interest. In counts I and II, Union Pacific sought to recover from the private developers the unpaid relocation expenses under breach-of-contract and quantum meruit theories, respectively. In count III, the railroad sued the City officials, claiming their failure to obtain a bond violated Mo. Ann. Stat. 107.170 (West 1986), which provided: 9 It is hereby made the duty of all officials, boards, commissions, commissioners, or agents of this state, or of any county, city, town, township, school, or road district in this state in making contracts for public works of any kind to be performed for the state, or for such county, city, town, township, school, or road district, to require every contractor of such work to furnish to the state, or to such county, city, town, township, school, or road district, as the case may be, a bond with good and sufficient sureties, in an amount fixed by said officials . . . and such bond, among other conditions, shall be conditioned for the payment of any and all materials . . . consumed or used in connection with the construction of such work . . . and for all labor performed in such work whether performed by subcontractor or otherwise. 10 After Union Pacific obtained a consent judgment with respect to its claims against Midland, the remaining claims were tried before the court. In a March 1999 decision, the court found in favor of Union Pacific on its quantum meruit claim against St. Louis Marketplace Limited Partnership, but rejected the railroad's 107.170 claims against City officials. See Union Pac. R.R. Co. v. Midland Equities, Inc., 45 F. Supp.2d 685 (E.D. Mo. 1999). 11 First, the court determined that the railroad relocation work was a public works project within the meaning of the statute. The court concluded that the track relocation work was for a public use and benefit because (1) the relocation of the tracks permitted the widening of Manchester Avenue; (2) the payment arrangements were City-approved; (3) the private developers' plans for relocating the tracks were subject to the approval, customary requirements, and supervision of the City's Board of Public Service; and (4) the redevelopment plan was in the public interest. The court rejected the City defendants' argument that 107.170 did not apply to the railroad project because the railroad could have obtained a mechanic's lien against the property. The court also determined that the individual City officials were properly named as defendants. See id. at 696-700. 12 The court concluded, however, that the City defendants were protected from liability under the official immunity doctrine. The court held that the ministerial component of compliance with 107.170 was satisfied by the Board's passage of Ordinance No. 62044. In the court's view, the remaining administrative steps to ensure compliance with the bond requirement were discretionary in nature, and the City defendants were therefore entitled to official immunity from any claims arising out of their failure to perform those administrative steps. See id. at 700. 13 Union Pacific appeals, arguing the district court incorrectly applied Missouri official-immunity doctrine. The City defendants contend the court's decision was correct, and argue in the alternative that railroad relocation project was not a public works project subject to the bonding requirements of 107.170.