ALEX NOFFEL, JR. v. CITY OF FULTON, KENTUCKY; ROBERT VAUGHN; AND MICHAEL GOODWIN
Annotate this Case
Download PDF
RENDERED: DECEMBER 22, 2000; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-002213-MR
ALEX NOFFEL, JR.
v.
APPELLANT
APPEAL FROM FULTON CIRCUIT COURT
HONORABLE WILLIAM L. SHADOAN, JUDGE
ACTION NO. 99-CI-00035
CITY OF FULTON, KENTUCKY;
ROBERT VAUGHN; AND MICHAEL
GOODWIN
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, JOHNSON AND MILLER, JUDGES.
JOHNSON, JUDGE: Alex Noffel, Jr. has appealed from the summary
judgment entered by the Fulton Circuit Court on August 19, 1999,
that dismissed his complaint which contested the acceptance by
the City of Fulton of a bid by Robert Vaughn to purchase real
estate when Vaughn’s bid was lower than the bid submitted by
Noffel.
Based on the authority of Ohio River Conversion, Inc. v.
City of Owensboro,1 which stated “absent fraud or collusion, the
courts will not interfere with power to accept or reject bids by
a governmental agency,” we affirm.
The facts of this case are not in dispute; and Noffel
does not contend that the case was not appropriate for summary
judgment.
Instead, he contends that as a matter of law summary
judgment should have been entered in his favor.
Thus, our review
is limited to determining whether the City was entitled to
judgment as a matter of law.2
On February 25, 1999, the City ran a legal notice in
the local newspaper of an ordinance declaring “[t]he former CocaCola Bottling Company property as surplus property, and
authorizing the City Manager of the City of Fulton, Kentucky to
advertise for sealed bids for the sale of [the] propert[y].”
The
ordinance continued by stating “with the City of Fulton having
the right to reject any and all bids” and that the parcel “shall
be sold ‘as is’ as to condition and title, and the City of Fulton
will in no way warrant or guarantee the condition of same.”
No
further conditions were placed on the bids.
A problem arose because the notice failed to specify a
deadline for the submission of bids.
Michael Goodwin, who was
named as a defendant and appellee, attempted to submit a bid
after the bids that had been received had been opened.
When
1
Ky.App., 663 S.W.2d 759, 761 (1984).
2
Scifres v. Kraft, Ky.App., 916 S.W.2d 779, 781 (1996).
-2-
Goodwin was informed by the City that his bid was not timely, he
advised the City that a deadline had not been included in the
advertisement.
At the Board of Commissioner’s meeting on March 8,
1999, the Commissioners decided that the February 25th notice was
defective since it failed to specify a deadline for the
submission of the bids.
A new ordinance was adopted which
contained all of the language in the previous ordinance, plus the
following:
“Sealed bids will be taken on the above surplus
property.
All bids must be in by Thursday, March 18, 1999 by
1:00 PM.
Sealed bids will be open [sic] in the city manager’s
office on the above date and time.”
Noffel submitted a bid for $15,010, and appellee Robert
Vaughn submitted a bid for $12,018.
At the Board of
Commissioner’s meeting on March 22, 1999, Commissioner Smith
moved that the City accept Noffel’s bid, but the motion died from
lack of a second.
Commissioner Hohlbein then stated that he
supported accepting Vaughn’s bid even though it was for $2,992
less than Noffel’s bid.
Commissioner Hohlbein made the following
points: (1) the City made a mistake on the first bids and Joe
Crass had the highest bid which was not accepted because of the
City’s mistake; (2) Vaughn’s bid was on behalf of Crass; (3)
Vaughn’s bid was approximately three times larger than Crass’
original bid; (4) Crass had stated his intentions of repairing
the building and putting his business in the building; and (5)
the City needs to convey a message to the public that it will
-3-
reward people who are willing to upgrade property and put a
business in the property.
The Board of Commissioners voted 3-0,
with one abstention, to accept Vaughn’s bid.
On March 30, 1999, Noffel filed a complaint in the
Fulton Circuit Court against the City, Vaughn and Goodwin.3
Noffel alleged that the City in an attempt to sell the property
“asked for sealed bids without any other restrictions and then
rejected [his] high bid.”
Noffel alleged that he was “an
individual, tax-paying citizen of the [C]ity of Fulton,
Kentucky,” who also was “the highest bidder” on the property.
Noffel claimed that “[a]lthough the City of Fulton could have
rejected all bids, by rejecting the high bid, the City turned
down the sale price that would most benefit the City’s interest
and the taxpayer’s interest.”
Noffel claimed that “[a]s a tax-
paying citizen of Fulton, Kentucky, [his] rights are being
violated and the City of Fulton should be required to sell the
surplus property to the highest bidder.”
Noffel also claimed
that his “rights as the high bidder are being violated and if the
property is transferred to the low bidder, [he] will be denied
the property.”
Noffel, the City and Vaughn all filed motions for
summary judgment.
On August 19, 1999, the trial court apparently
granted summary judgment to the City and Vaughn since it ordered
the complaint to be dismissed.
However, as is evident from the
3
It is unclear why Goodwin was sued.
appearance and did not file a brief.
-4-
He has not entered an
language quoted below, the basis for the order is unclear.
The
trial court’s order in toto stated:
The Court having considered the Motions
for Summary Judgment by Plaintiff, as well as
the Defendant, and having reviewed the file
and the Memorandums contained therein, is of
the opinion that the City of Fulton passed an
Ordinance directing the City Manager to sell
certain surplus property. There does not
appear to be a Notice to the public by the
City Manager or the City of Fulton, Kentucky,
that the property would be sold and what
conditions were required for the bid;
therefore, the issue as raised by the parties
at this time is moot. The Court is of the
opinion that if the City wishes to sell the
surplus property, they have a right to do so,
but they should specify under what conditions
in the Notice for bids. The Court is also of
the opinion that the Owensboro case cited by
the Defendants is the prevailing law involved
in this matter and the Court being otherwise
sufficiently advised,
IT IS HEREBY ORDERED the Complaint is
dismissed.
This appeal followed.
Noffel has stated three arguments in his brief: (1)
“The trial court’s ruling that the Appellant must plead fraud or
collusion to challenge the award of the bid to Robert Vaughn was
erroneous”; (2) “The City of Fulton’s decision to award the CocaCoal Plant to Robert Vaughn was arbitrary and capricious and
violated generally accepted principles that a municipality must
act in good faith and treat citizens equally”; and (3) “The
Appellant, Alex Noffel, Jr., was denied his constitutional rights
by the City of Fulton whose actions were an invasion of his
legally protected property interest.”
-5-
In his brief, Vaughn
addresses the arguments raised by Noffel without any reference to
the confusion caused by the trial court’s order.4
Regardless of this confusion, everyone seems to be in
agreement that the applicability of Ohio River Conversion, Inc.,
supra, is at the center of this appeal.
In Ohio River
Conversion, this Court affirmed the Daviess Circuit Court’s
summary judgment in favor of the City of Owensboro that had
dismissed Ohio River Conversion’s complaint.
Ohio River
Conversion had bid $7,610 for a boat dock owned by the City of
Owensboro that had been advertised for sealed bids.
The City of
Owensboro’s legal notice included “right to reject” language
similar to the City of Fulton’s: “The City of Owensboro reserves
the right to reject any and all bids and to waive any
irregularities in said bids.”5
The City of Owensboro received a
second bid for $7,000 from Meschko.
When the City’s Board of
Commissioners met to make the award of the sale, the
Commissioners “learned that Ohio River Conversion intended to
remove the boat dock to Louisville, thus leaving some of the
boating public without space to harbor their craft” and that
Meschko “would operate the dock in Owensboro.”
This Court discussed the Model Procurement Code
(Kentucky Revised Statutes (KRS) Chapter 45A) under which the
City of Owensboro operated and noted that “it must be kept in
4
The City’s brief merely adopted Vaughn’s brief.
5
Id. at 760.
-6-
mind that its primary function is to benefit the citizens, as is
the real purpose of government itself and the laws pertinent
thereto.”
This Court then stated that it was lead “to inquire as
to the standing of the appellant to bring the action in the first
instance.”
This Court then cited the established law that
provides that an unsuccessful bidder does not have “standing to
request the judicial award of the contract or seek damages from
the municipality.”
While this Court recognized “that a qualified
taxpayer of the city [may] commenc[e] this type of litigation . .
. appellant is neither a taxpayer nor a resident of Owensboro.”
This Court then noted that it was “cognizant of the fact that the
trial court made no reference to the question of standing and
appellees only incidentally alluded to it by way of brief, but we
deem it essential to the consideration of this cause.”
With that
said, this Court then went in an entirely different direction,
and stated:
There are other legal theories of long
standing having application here which we are
unwilling to disturb and those are, absent
fraud or collusion, the courts will not
interfere with power to accept or reject bids
by a governmental agency. No fraud or
collusion was alleged here. In addition,
municipalities have wide discretion in the
exercise of acceptance or rejection, and
where they reserve the right to reject, the
courts will not disturb their actions based
on mere technicality, even if made unwisely
or under mistake. Fosson v. Fiscal Court of
Boyd County, Ky., 369 S.W.2d 108 (1963).6
6
Ohio River Conversion, supra at 761.
-7-
Noffel recognizes the obvious need to distinguish his
case from Ohio River Conversion and attempts to do so in three
ways.
Noffel first notes that Noffel resides in the City of
Fulton and pays taxes there.
This distinction is significant as
to the issue of standing, but it does not appear that the trial
court relied upon Ohio River Conversion’s holding on standing to
bar Noffel’s claim.
Thus, the fact that the case sub judice is
distinguishable from Ohio River Conversion on the issue of
standing is of no consequence.
Secondly, Noffel points to the $610 difference in the
bids in Ohio River Conversion as compared to the $2,992
difference in the bids in the case sub judice; and “more
importantly” to the fact that “the City of Fulton would be
selling government surplus property for less than two-thirds of
its appraised value of $32,000.”
We fail to see how the selling
price matters unless fraud or collusion is alleged.
As this
Court stated in Ohio River Conversion, “the court will not
disturb [the municipalities’] actions . . . even if made
unwisely.”7
As his third grounds for distinguishing Ohio River
Conversion, Noffel points out that “the [C]ity of Owensboro was
not merely selling surplus property, but was selling a municipal
boat dock which it utilized for the benefit of its citizens who
own boats . . . .
7
Clearly, the rationale for awarding [ ] the
Id. at 761.
-8-
boat dock to someone other than the higher bidder was that it was
in the public’s best interests.”
However, as Vaughn points out
in his brief, the “Commissioners determined that Fulton and its
citizens did in fact have an interest that would be protected if
[ ] Vaughn’s bid . . . was accepted.”
We agree and we believe
the Commissioners sufficiently expressed that interest when they
expressed their intent “to reward people who are going to put a
business in and upgrade the property to make it look like
something rather than just being a vacant rental building.”
Since Noffel has not been able to distinguish Ohio River
Conversion from this case, we must follow the established law and
affirm the dismissal of the complaint.
For his second issue, Noffel claims the City’s actions
were “arbitrary and capricious and violated generally accepted
principles that a municipality must act in good faith and treat
citizens equally.”
The foreign cases relied upon by Noffel
obviously are not binding on this Court and cannot overcome the
established law as set forth in Ohio River Conversion.
Once
again, Noffel’s claim must fail because there has been no
allegation of fraud or collusion.
Noffel’s last issue which alleges a violation of his
Fourteenth Amendment right to equal protection was not presented
to the circuit court and accordingly was not preserved for our
review.8
8
Regional Jail Authority v. Tackett, Ky., 770 S.W.2d 225,
(continued...)
-9-
For the foregoing reasons, the order of the Fulton
Circuit Court is affirmed.
ALL CONCUR.
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE, ROBERT VAUGHN:
Jim Paitsel
Fulton, KY
Stacey A. Blankenship
Paducah, KY
BRIEF AND ORAL ARGUMENT FOR
APPELLEE, CITY OF FULTON:
Hal Warren
Fulton, KY
8
(...continued)
228 (1989).
-10-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
