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664 S.E.2d 541
IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2008 Term
___________
No. 33707
___________
BERNARD J. FOLIO and GRANDEOTTO, INC.,
Plaintiffs Below, Appellants,
V.
HARRISON-CLARKSBURG HEALTH DEPT., et al.,
Defendants Below, Appellees,
______________________________________________________
Appeal from the Circuit Court of Harrison County
The Honorable John Lewis Marks, Jr., Judge
Civil Action No. 04-C-659-1
AFFIRMED
_____________________________________________________
Submitted: April 16, 2008
Filed: June 17, 2008
Jerry Blair, Jr., Esquire
Blair, Conner & McIntyre-Nicholson PLLC
Clarksburg, West Virginia
Attorney for Appellants
|
Michael J. Florio, Esquire
Florio Law Offices
Clarksburg, West Virginia
Attorney for Appellees |
The Opinion of the Court was delivered PER CURIAM.
SYLLABUS BY THE COURT
1. “A motion for summary judgment should be granted only when it is
clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not
desirable to clarify the application of the law.” Syllabus Point 3, Aetna Co. v. Federal Co.,
148 W. Va. 160, 133 S.E.2d 770 (1963).
2. “A circuit court's entry of summary judgment is reviewed de novo.”
Syllabus Point 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).
3. “[S]ummary judgment cannot be defeated on the basis of factual
assertions contained in the brief of the party opposing a motion for such judgment.” Syllabus
Point 3, Guthrie v. Northwestern Mutual Life Insurance Co., 158 W. Va. 1, 208 S.E.2d 60
(1974).
4. “The mere fact that a particular cause of action contains elements which
typically raise a factual issue for jury determination does not automatically immunize the case
from summary judgment. The plaintiff must still discharge his or her burden under West
Virginia Rule of Civil Procedure 56(c) by demonstrating that a legitimate jury question, i.e.
a genuine issue of material fact, is present.” Syl. Pt. 1, Jividen v. Law, 194 W. Va. 705, 461
S.E.2d 451 (1995).
PER CURIAM:
The instant action is before this Court upon the appeal of Bernard J. Folio and
Grandeotto, Inc.
(See footnote 1) [hereinafter “Appellants”] from a March 13, 2007, order granting Harrison-
Clarksburg Health Department's and Harrison-Clarksburg Board of Health's
(See footnote 2) [hereinafter
“Appellees”] Motion for Summary Judgment. On appeal, the Appellants allege that errors
were committed by the circuit court in its finding that no legal announcement of competitive
bidding is necessary when a local combined board of health seeks to relocate its facilities;
by finding that no genuine issue of material fact existed regarding whether constructive fraud
existed; and by ruling that actual fraud had to be proven to maintain an action. The
Appellees conversely allege that competitive bidding was not required, and there was no
evidence of constructive fraud. This Court has before it the petition for appeal, all matters
of record and briefs and arguments of counsel. For the reasons expressed below, the March
13, 2007, order of the Circuit Court of Harrison County is affirmed.
I.
FACTUAL AND PROCEDURAL HISTORY
The instant action arose out of the effort of the Appellees to acquire building
space for the relocation of its offices.
(See footnote 3) In response to newspaper publicity of its intent, the
Appellees received approximately twenty proposals, including one from Appellants offering
to lease a building recently occupied by Rite-Aid. Although the Rite-Aid building was one
of the three finalists, the Appellees decided to lease the Toothman Rice building, another
finalist.
(See footnote 4)
The Appellants commenced action in the Circuit Court of Harrison County
challenging the process the Appellees used in selecting the new location for their facilities,
seeking to have the Appellants' decision annulled and its building selection process
“redone.” In its complaint, Appellants alleged the following: 1) that the chairperson of the
Board appointed by the City of Clarksburg was at all relevant times a nonresident of the City,
thus making the Appellants' lease of the Toothman Rice building “voidable as emanating
from an illegally constituted entity”; 2) that a conflict of interest existed because Main Street
Realty, Inc., the owner of the Toothman Rice building, was then represented by the same law
firm that then represented the City of Clarksburg, and a partner of that firm was then the
Secretary/Treasurer and possible part-owner of Main Street Realty, Inc.; 3) that the rating
scores for the proposed properties were arbitrary and capricious because the Appellants
established an arbitrary scoring procedure for which there was no standard or training
provided or assessment of criteria agreed for assigning said scores; and 4) that the
Appellants' lease of the Toothman Rice building at a rental amount significantly more
expensive than the equivalent or superior property proposed by the Appellants and by others
constituted malfeasance and a breach of the Appellees' fiduciary duty and the public trust.
Appellees initially filed a Motion to Dismiss which was converted into a
Motion for Summary Judgment. The circuit court dismissed one claim against the Appellees
concerning the composition of the organization's Board at the time the tentative relocation
decision was made. However, the circuit court ruled that the substantive claim regarding the
selection and relocation of the Health Department facilities could only be dismissed upon
proof of the absence of “fraud, collusion, or palpable abuse of discretion.”
(See footnote 5) The court
permitted additional time for discovery to be conducted. At the close of discovery, Appellees
filed a renewed Motion for Summary Judgment based on the absence of evidence of fraud,
collusion, or palpable abuse of discretion. After a hearing on the issues raised in the parties
pleadings, the circuit court granted Appellees' motion, finding that no such evidence existed.
(See footnote 6) It is from that order that Appellants now appeal.
II.
STANDARD OF REVIEW
“A motion for summary judgment should be granted only when it is clear that
there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable
to clarify the application of the law.” Syl. Pt. 3, Aetna Co. v. Federal Co., 148 W. Va. 160,
133 S.E.2d 770 (1963). Furthermore, “[a] circuit court's entry of summary judgment is
reviewed de novo.” Syl. Pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994). Mindful of these standards, we proceed to consider the arguments of the parties.
III.
DISCUSSION
A. Competitive Bidding
In their first assignment of error, Appellants contend that the circuit court erred
in finding that the Appellees were not required to publicly solicit competitive bids or
advertise for potential properties to relocate the Health Department facilities. While
Appellants concede that West Virginia Code §16-2-1 et seq. (2000), the statute under which
the Board of Health was created and established and under which it is operated and
maintained, does not require Appellees to solicit competitive bids for office space through
a published source,
(See footnote 7) they argue that there are three reasons why the Appellees should have
been required to do so: 1) procurement constraints of its sources of funding; 2) procurement
restraints of its creating agencies; and 3) fair and open government.
Appellants first contend that the Appellees are a recipient of local, state and
federal funds,
(See footnote 8) and that as a consequence, it must use a procurement process that is at least
as comparatively rigorous as that of the funding agency. However, Appellants do not
identify the local, state and federal agencies from whom the Appellees allegedly receive
funds, do not reveal what process any such agencies must follow in acquiring rental office
space,
(See footnote 9) and do not provide any legal basis for their claim that at a minimum the Appellees
must use the same procurement process as its funding agencies, whatever they may be.
(See footnote 10)
In support of their argument, Appellants reference
West Virginia University
Contractors Association v. Laidley Field Athletic and Recreational Center Governing Board,
164 W. Va. 127, 260 S.E.2d 847 (1979), and
Burgess v. City of Cameron, 113 W. Va. 127,
166 S.E. 113 (1932). However, we find these two cases wholly irrelevant to Appellants'
claim.
In
Laidley Field, the plaintiffs' complaint alleged that they had a legal right to
have contracts of the Laidley Field Board submitted for competitive bidding. However, the
issues before this Court were whether the plaintiffs had standing to seek a declaratory
judgment on the issue, and whether a justiciable controversy existed. 164 W. Va. 127, 260
S.E.2d 847. This Court did not decide whether the Laidley Field Board was required to
submit the contract at issue to competitive bidding. That issue was left for the circuit court
to decide upon remand.
Id. at 131, 850. As for Appellants' reliance on
City of Cameron,
competitive bidding was required for the resurfacing of streets in that case because it was
specifically imposed upon the city by its charter. 113 W. Va. 127, 166 S.E. 113. Such is not
the case before us. Appellants have not cited any legal authority or precedent requiring legal
advertisements or competitive bidding in these specific circumstances, nor do they cite any
legal authority that would cause us to reverse the circuit court's conclusion.
(See footnote 11) Accordingly,
the decision of the circuit court on this issue is affirmed.
As for Appellants' two remaining arguments that the Appellees are required
to publicly solicit competitive bids or advertise for potential properties due to procurement
restraints of its creating agencies and the principles of fair and open government, we
disagree. Appellants cited no legal authority or precedent imposing a statutory requirement
upon the Appellees' creating agencies to solicit competitive bidding in acquiring office rental
space. Rather, they simply assume that such is required. Furthermore, recognizing
separation of powers principles, it is not for this Court to judicially adopt public policy that
“fair and open government” requires the solicitation of competitive bids for rental office
space, when that decision lies exclusively with the legislature. The Legislature, not this
Court, is the appropriate forum for that argument. For these reasons, the decision of the
circuit court on these issues is also affirmed.
B. Fraud
Appellants also allege that the circuit court erred in granting Appellees'
summary judgment motion because genuine issues of material fact existed regarding whether
constructive fraud existed, and because the circuit court consistently ruled that Appellants
had to prove actual fraud to maintain an action. Appellants cite to
Miller v. Huntington &
Ohio Bridge Co., 123 W. Va. 320, 15 S.E.2d 687 (1941), in support of their arguments.
(See footnote 12)
With respect to Appellants' argument that the circuit court consistently ruled
that they had to prove actual fraud, Appellants have not identified the specific circuit court
rulings of which they complain. Nor are we able to find such a finding in the circuit court's
order granting Appellees' summary judgment motion. To the contrary, the circuit court, after
reviewing and reciting the elements of both constructive and actual fraud as enunciated in
Miller, found that Appellants had produced no evidence of either actual fraud or constructive
fraud on the part of the Appellees in the process of acquiring office space. Specifically, the
circuit court also concluded that Appellants had failed to prove constructive fraud because
they made no showing that Appellees breached any legal or equitable duty that tended to
deceive others, tended to violate public or private confidence, or tended to injure public trust.
Accordingly, the circuit court found that there were no factual issues with respect to either
actual or constructive fraud to be decided by a jury.
Additionally, regarding Appellants' argument that a genuine issue of material
fact exists as to whether constructive fraud existed, we find no error on behalf of the circuit
court on this issue. In their brief, Appellants point to allegations in their complaint as
evidence of genuine issues of material fact:
“[t]he Appellants
have set forth multiple reasons in their
complaint why the transactions for the relocation of the Department of
Health offices are
highly suspect, including the price paid for the new
facilities in contrast to the other facilities allegedly considered by the
Appellee and their suitability, the fact that the Board of Health
members wholly relied upon their executive director to arbitrarily
assign worth to prospective properties when the board members didn't
even know what the members meant or how they were produced and
worse yet, for which there was no standard of compilation or
interpretation. The numbers on Exhibit One are, in the strictest
mathematical/scientific sense,
arbitrary. [Emphasis in original.]
Further, the Appellants
have alleged the existence of a conflict of
interest between the successful “bidder” and the Appellee due to the
relationship between the office of the city attorney and the ownership
and representation of the corporation owning the selected property
being a member of the law firm which represents the City of Clarksburg
(Main Street Realty, Inc., represented by Young, Morgan & Cann, and
owned by Mr. Carmine Cann, Esquire). (Emphasis added).
We have long held that “[s]ummary judgment cannot be defeated on the basis
of factual assertions contained in the brief of the party opposing a motion for such
judgment.” Syl. Pt. 3,
Guthrie v. Northwestern Mutual Life Insurance Co., 158 W. Va. 1, 208
S.E.2d 60 (1974). “[S]elf-serving assertions without factual support in the record will not
defeat a motion for summary judgment.”
Williams v. Precision Coil, Inc., 194 W. Va. 52, 61
n. 14, 459 S.E.2d 329, 338 n. 14 (1995)(
citing McCullough Oil, Inc. v. Rezek, 176 W. Va.
638, 346 S.E.2d. 788 (1986)). Rule 56(e) of the
West Virginia Rules of Civil Procedure states in part:
“[w]hen a motion for summary judgment is made and supported as
provided in this rule, an adverse party may not rest upon the mere
allegations or denials of the adverse party's pleading, but the adverse
party's response, by affidavits or otherwise provided by this rule, must
set forth specific facts showing that there is a genuine issue for trial.
If the adverse party does not so respond, summary judgment, if
appropriate, shall be entered against the adverse party.”
W. Va. R. Civ. P. 56(e), in part (1998).
Appellants may not simply rest upon the mere allegations of their complaint
in opposing a summary judgment motion. Rather, they must set forth specific facts showing
that there is a genuine issue of material fact for trial. Further, Appellants must identify
specific facts in the record and articulate the precise manner in which that evidence supports
their claims.
See Powderidge Unit Owners Ass'n v. Highland Properties, LTD., 196 W. Va.
692, 699, 474 S.E.2d 872, 879 (1996).
Appellants also assert that the main genuine issue of material fact is “whether
the [building] selection process was arbitrary or worse (constructive fraud)” in that the Board
“did not have the discretion to abdicate its responsibility to another in making the decisions
regarding relocation”; in that “the decision-making was . . . conferred . . . to an individual
employee of the Board; and in that “[t]he deliberation requirement - the duty- was absolutely
not satisfied herein.” However, the circuit court concluded, and we agree, that no legal
authority exists to prohibit the Appellees from delegating tasks and duties to certain of its
members in the furtherance of their objectives.
Generally, fraud is a question of fact to be determined by the jury from all the
circumstances of the case.
Kessel v. Leavit, 204 W. Va. 95, 132 fn. 38, 511 S.E.2d 720, 757
fn. 38 (1998)(citing 8B Michie's Jur.
Fraud and Deceit §67, at 433 (1994)). However, we
have held that “[t]he mere fact that a particular cause of action contains elements which
typically raise a factual issue for jury determination does not automatically immunize the case
from summary judgment. The plaintiff must still discharge his or her burden under West
Virginia Rule of Civil Procedure 56(c) by demonstrating that a legitimate jury question, i.e.
a genuine issue of material fact, is present.” Syl. Pt. 1,
Jividen v. Law, 194 W. Va. 705, 461
S.E.2d 451 (1995).
The circuit court thoroughly and carefully reviewed the evidence and made the
following determinations in its summary judgment order: Appellants failed to produce any
evidence that the amount paid for the Toothman Rice building was in excess of the market
value of the building or was so excessive as to constitute constructive fraud
(See footnote 13) ; Appellants
failed to show how the asserted conflict of interest disqualified the Toothman Rice building
for lease by the Board; Appellants did not present any evidence showing that the facts were
in dispute as to any issue it raised; Appellants cited no legal authority that would bar the
Board from devising its own methods and procedures for the evaluation of properties;
Appellants essentially relied on argument and allegations to defeat the Board's motion for
summary judgment; and finally, Appellants produced no evidence of fraud whatsoever, either
actual or constructive. Based on the record before us, we find that the circuit court did not
commit error in making such findings, and we find nothing in the record demonstrating that
the circuit court's order should otherwise be reversed. Accordingly, we affirm the rulings
of the circuit court below.
IV.
CONCLUSION
For the reasons stated herein, the circuit court's order of March 13, 2007, is
hereby affirmed.
Grandeotto, Inc. is a closely-held corporation owned primarily by Bernard J. Folio
and his children. Grandeotto holds and manages real estate in the City of Clarksburg and
elsewhere in West Virginia.
Footnote: 2 The Harrison-Clarksburg Board of Health is a “combined local board of health”
existing under the provisions of West Virginia Code §16-2-1 et seq. (2000). The Harrison-
Clarksburg Health Department “means the staff of [the Harrison-Clarksburg Board of
Health].” W. Va. Code §16-2-2(n).
Footnote: 3 Prior to April 2001, Appellees occupied rent-free facilities at the Harrison County
Courthouse. Due to lack of space, the Appellees were required to relocate offices to the
Policano Building in Clarksburg. When their rent increased on April 1, 2005, relocation
again became necessary.
Footnote: 4 Among other reasons, Appellees assert that their decision was precipitated by the
fact that the chosen property was essentially ready for occupation, whereas the Appellants'
property still needed to be built out, at the Appellees' expense. The Appellees allege that
because they would have nothing to show for any improvements made to the property at the
end of the lease, and because they risked incurring a dramatic rental increase upon making
changes to the property, they did not select Appellants' property.
Footnote: 5 “A court will not ordinarily interfere with the action of a public officer or a tribunal
clothed with discretion, in the absence of a clear showing of fraud, collusion, or palpable
abuse of discretion.” Syl. Pt. 2,
Bane v. Bd. of Educ. of Monongalia County, 178 W. Va. 749,
364 S.E.2d 540 (1987)(internal citations omitted).
Footnote: 6 The order entered by the circuit court is commendable. The twenty-nine page order,
containing detailed findings of fact and conclusions of law, thoroughly sets forth the
evidence developed during the discovery process.
Footnote: 7 The absence of such a requirement in West Virginia Code §16-2-1 et seq. is in
contrast with a large number of other statutes which do require competitive bidding, some
solicited through published public notice. These are but a few examples: W. Va. Code §3-
4A-5 (1982) (requiring county commissions to acquire vote recording devices “by sealed
competitive bids.”); the West Virginia Fairness in Competitive Bidding Act, W. Va. Code
§5-22-1 et seq. (2004) (requiring, except as provided therein, the state and its subdivisions
to “solicit competitive bids for every construction project exceeding twenty-five thousand
dollars in total cost.”); W. Va. Code §5A-3-10(b),(d)(2006) (requiring the Purchasing
Division of the Department of Administration to “solicit sealed bids for the purchase of
commodities and printing which is estimated to exceed twenty-five thousand dollars,” and
to solicit such bids “by public notice . . . published by any advertising medium the director
deems advisable.”); W. Va. Code §12-1-2(d)(2005) (requiring “[t]he State Treasurer [to]
solicit state depositories for disbursement accounts through competitive bidding by eligible
banks in the state.”); and W. Va. Code §33-20F-6(b) (2003) (requiring any contract entered
into by the board of directors of a Physicians Mutual Insurance Company for the
administration of some or all of the affairs of the company between July 1, 2004, and June
30, 200, to be awarded “by competitive bidding. . .”).
Footnote: 8 Appellants have not provided any facts supporting this allegation.
Footnote: 9 Appellants claim that the charter of the City of Clarksburg would require the city
“to solicit competitive bids in acquiring a lease to third-party-owned real estate.” However,
the passage Appellants quote from the charter imposes no such requirement. Rather, it
simply voids contracts and purchases by any city officer, department or agency not made “in
conformity with all applicable provisions of general law, this Charter, and with all rules and
regulations fixed by ordinance, from time to time, concerning a dollar amount for which
competitive bids shall be required for contracts for
improvements or purchases of materials,
supplies and equipment.” (Emphasis added).
Footnote: 10 Appellants would have this Court simply assume that each of the Appellees'
funding agencies is required to solicit bids for acquiring office space. This Court cannot
decide cases on the basis of assumptions, cannot assume that all of the Appellees' funding
agencies are bound by an identical procurement process, and cannot make public policy by
imposing upon the Appellees the same requirements as may be statutorily imposed upon an
agency from which it receives funds.
Footnote: 11 Even if legal advertisements had been required, any alleged deficiency in the
process was essentially rendered moot by the large amount of media publicity covering the
relocation of the Health Department facilities. Appellants were obviously aware of the
relocation and thus, were not injured by any absence of legal advertisement.
Footnote: 12 As cited in
Miller, “'[a]ctual fraud' is intentional fraud and consists in deception,
intentionally practiced to induce another to part with property or to surrender some legal right
and which accomplishes the end designed.” Syllabus,
Id. “'Constructive fraud' is a breach
of legal or equitable duty which irrespective of moral guilt of the fraud feasor, the law
declares fraudulent because of its tendency to deceive others, to violate public or private
confidence, or to injure public interest, and neither actual dishonesty of purpose nor intent
to deceive is an essential element of constructive fraud, whereas intent to deceive is an
essential element of actual fraud, the presence or absence of such intent distinguishes actual
from constructive fraud.”
Id.
Footnote: 13
“Where the question of the market value of the property is one on which reasonable
minds may differ, the purchase thereof by a county court, at a price within the range of the
differences of opinion as to its value, will not be set aside as constructively fraudulent on the
grounds of excessiveness in the price paid.” Syl. Pt. 7, Miller v. Huntington & Ohio Bridge
Co., 123 W. Va. 320, 15 S.E.2d 687.