author: DEININGER, PJ.

text:
    James Cape & Sons Company, Plaintiff-Respondent, v. Terrence D. Mulcahy, Secretary, and State of Wisconsin Department of Transportation, Defendants-Appellants.

    Court of Appeals

      No. 02-2817.

      Submitted on briefs March 10, 2003.

      Decided October 30, 2003.

    2003 WI App 229
    (Also reported in 672 N.W.2d 292.)

      On behalf of the defendants-appellants, the cause was submitted on the briefs of Frank D. Remington, assistant attorney general, and James E. Doyle, attorney general.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Brian W. Mullins and Carl A. Sinderbrand of Wickwire Gavin EC., Madison.
    Before Deininger, PJ., Vergeront and Lundsten, JJ.

       Petition for review granted 1-23-04.

   DEININGER, PJ.

¶ 1. The Wisconsin Department of Transportation and its secretary appeal an order granting summary judgment in favor of James Cape & Sons Company, a road builder. The effect of the order is to release Cape from its $100,000 "proposal guaranty" that the department declared forfeited when Cape refused to perform a road construction contract on which it had submitted the low bid. The State claims Cape is not entitled to summary judgment because the record does not establish that "in making the mistake, error or omission" in its bid, Cape "was free from carelessness, negligence or inexcusable neglect." Wis. Stat. § 66.0901(5) (2001-02).

2. The trial court concluded that because Cape notified the department of the error before the department had awarded the contract to Cape, the "free from. . . inexcusable neglect" standard did not apply. Although we agree that the language of Wis. Stat. § 66.0901(5) may reasonably be interpreted in the manner the trial court did, we conclude that the holding of Nelson, Inc. v. Sewerage Comm'n of Milwaukee, 72 Wis. 2d 400, 241 N.W.2d 390 (1976), precludes this interpretation. Based on Nelson, we conclude that Cape was required to show its freedom from "carelessness, negligence or inexcusable neglect." We also conclude, however, that Cape did so on the present record. Accordingly, we affirm the order directing the return of Cape's check for $100,000.

BACKGROUND

¶ 3. The appealed order disposes of cross-motions for summary judgment, and neither party argues that a dispute of material fact bars summary judgment in favor of the other. The parties have therefore effectively stipulated to the material facts. See Lucas v. Godfrey, 161 Wis. 2d 51, 57, 467 N.W.2d 180 (Ct. App. 1991). We derive the key events in the background summary which follows from the parties' submissions on summary judgment.

¶ 4. The department solicited bids for construction of a highway interchange in Milwaukee. The bids were to be opened at 9:00 a.m. on October 10, 2000, as were bids on several other highway projects. As is apparently the custom, prospective bidders, including Cape, assembled personnel in rooms at a Madison hotel on the evening before the bid opening in order to compile and rework bids for submission just before the 9:00 a.m. deadline. Cape's bid team included some eight persons, equipped with several computers and printers, project folders and telephones.

¶ 5. The Cape bid team worked through the evening and into the morning hours, receiving proposals from prospective subcontractors, rejecting or accepting them, and incorporating the accepted proposals into Cape's final bids. Hard copies of the subcontractor proposals are customarily placed in appropriate folders and the figures are also entered into a computer so that comparisons can be made and final bid figures computed. One prospective subcontractor, Zenith Tech, submitted a proposal to Cape at about 6:00 a.m. Cape personnel identified Zenith Tech's bid as the low one for a component of the interchange project and entered the quotation into its bid calculations. At about 8:00 a.m., Zenith Tech discovered an error in the proposals it had submitted to Cape and two other contractors. Accordingly, Zenith Tech notified the three contractors by phone between 8:00 and 8:30 a.m. of an upward revision in its quoted price. Cape personnel compared the revised quotation with a proposal it had received for the item from a different subcontractor and concluded that Zenith Tech was still low for the item.

¶ 6. Revisions from prospective subcontractors are apparently not uncommon during the final bid preparation process, and Cape personnel have several mechanisms available for incorporating last-minute revisions in its final bid, including making handwritten changes on the final bid sheet. The higher figure for Zenith Tech's work did not, however, become a part of the "final schedule" Cape personnel printed out sometime between 8:35 and 9:00 a.m. Cape personnel reviewed the final schedule and made a handwritten change to another item on it, but no change was made to the Zenith Tech item, which continued to reflect Zenith Tech's original, lower quotation. As a result, Cape's bid was $450,450 lower than if the revised Zenith Tech figure had been inserted. The final bids of two other contractors who utilized Zenith Tech for the item in question reflected the revised, higher Zenith Tech quotation.

¶ 7. The parties' subsequent actions and the litigation which followed involve a dispute over the interpretation and application of Wis. Stat. § 66.0901(5). We quote the subsection below in its entirety, but in light of the parties' arguments, we have divided the statutory language into three parts and identified each with a bracketed numeral:

(5) Corrections of errors in bids [1] If a person submits a bid or proposal for the performance of public work under any public contract to be let by a municipality and the bidder claims that a mistake, omission or error has been made in preparing the bid, the bidder shall, before the bids are opened, make known the fact that an error, omission or mistake has been made. If the bidder makes this fact known, the bid shall be returned to the bidder unopened and the bidder may not bid upon the public contract unless it is readvertised and relet upon the readvertisement. [2] If a bidder makes an error, omission or mistake and discovers it after the bids are opened, the bidder shall immediately and without delay give written notice and make known the fact of the mistake, omission or error which has been committed and submit to the municipality clear and satisfactory evidence of the mistake, omission or error and that it was not caused by any careless act or omission on the bidder's part in the exercise of ordinary care in examining the plans or specifications and in conforming with the provisions of this section. [3] If the discovery and notice of a mistake, omission or error causes a forfeiture, the bidder may not recover the moneys or certified check forfeited as liquidated damages unless it is proven before a court of competent jurisdiction in an action brought for the recovery of the amount forfeited, that in making the mistake, error or omission the bidder was free from carelessness, negligence or inexcusable neglect.

Section 66.0901(5) (emphasis added).

¶ 8. Cape's bid was the lowest submitted for the interchange project, and it discovered the erroneous Zenith Tech figure in its bid soon after bid opening. Cape notified the department, in writing, on the same day the bids were opened that its bid contained an error. In its hand-delivered letter, Cape explained the $450,450 error:

The error was inadvertently made when we carried over the wrong unit price of a subcontractor into our computer generated bid tabulation ....
.. .We discovered the error when we examined our bid shortly after opening ....
The error is in the unit price for [the item for] Concrete Masonry, Bridges. This item is a subcontractor item and is not an item Cape would perform .... At around 8:30 or 8:45 a.m. this morning, shortly before the bids were due, and at a hectic time for us, Zenith Tech phoned us and said their unit price for [the item was a higher figure]. The revised unit price did not get translated into our final bid tabulation.

¶ 9. Cape attached copies of documents to its letter in support of its explanation of the error. It closed by requesting the department to correct its bid to a figure $450,450 higher than its original bid containing the error, acknowledging that, as a result, Cape might no longer be the low bidder on the project. Alternatively, Cape asked that if its bid could not be corrected, it "be returned and that our bid bond not be claimed upon." The department responded to Cape three days later, rejecting its request to correct its bid:

You asked to have your bid corrected. Neither the statutes nor specifications allow for a bid correction after the bids are opened. We will not make the corrected change. In the alternative, you have asked that your bid be returned and that your bid bond not be claimed upon. We can consider your request to withdraw your bid but you will forfeit the proposal guaranty. You will not be entitled to recover the forfeited proposal guaranty ($100,000) unless you prove that the making of the "error" was free from carelessness, negligence or inexcusable neglect. Section 66.29(5), Stats. If you do not withdraw, you are responsible for the signed bid....

¶ 10. Cape replied to the department's letter by phone, again maintaining that its error was clerical in nature and thus excusable, and requesting a meeting with the department to provide more information if needed. On October 24, 2000, the department notified Cape by letter that it was awarding Cape the contract at its original bid price. Two weeks later, Cape informed the department that it "will not be executing the contract because of the error," and renewed its requests for a meeting and for "relief from the proposal guarantee." Cape also asserted in its letter that "the error in our bid was by a clerical person who was finalizing our bid and was not performed by someone who was reviewing the plans, specifications, or making judgments as to the cost of the work."

¶ 11. On November 17, 2000, the department notified Cape that it had "annulled" its award of the interchange contract to Cape and had awarded the contract instead to the second lowest bidder. The department also informed Cape that it would he "required to forfeit the Proposal Guaranty for this proposal in the amount of $100,000," but agreed to meet with Cape "to discuss this matter." Further discussions were of no avail, however, and the department continued to demand the forfeiture of $100,000 for Cape's failure to accept the tendered contract. Cape refused to pay and commenced this action, seeking a judgment declaring that it was entitled to correct its bid and be released from its bid bond. The parties stipulated to Cape's posting with the court a check for $100,000, payable to the department, to abide the outcome of the litigation, thereby permitting Cape's surety to be dismissed from the litigation.

¶ 12. Both parties moved for summary judgment. The trial court determined there were no material facts in dispute and that the case was primarily governed by the second part of Wis. Stat. § 66.0901(5). The court concluded Cape had established that (1) it notified the department immediately after bid opening of the error, and (2) that the error had not arisen from carelessness in examining plans and specifications or conforming to statutory requirements. Accordingly, relying on its reading of the statute and relevant case law, the court concluded the department should have allowed Cape to correct its bid before the department awarded the contract. The court also ruled in the alternative that, if the showing set forth in the third part of the statute (freedom from "carelessness, negligence or inexcusable neglect") was required on these facts, Cape had made such a showing. The court therefore denied the department's motion for summary judgment, granted Cape's and ordered that Cape's $100,000 check be returned. The department appeals.

ANALYSIS

¶ 13. We review the granting and denial of motions for summary judgment de novo, applying the same methodology and standards as the trial court. See Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). If there are no disputed issues of material fact, summary judgment is proper where the moving party is entitled to judgment as a matter of law. See id. As we have noted, when both parties move for summary judgment and neither argues that factual disputes bar the other's motion, the " 'practical effect is that the facts are stipulated and only issues of law are before us.'" See Lucas v. Godfrey, 161 Wis. 2d 51, 57, 467 N.W.2d 180 (Ct. App. 1991) (citation omitted). Although our review is de novo, we are aided in this case by the trial court's thoughtful analysis. See Katzman v. State Ethics Bd., 228 Wis. 2d 282, 291, 596 N.W.2d 861 (Ct. App. 1999).

¶ 14. The legislature enacted the predecessor of Wis. Stat. § 66.0901(5) in Laws of 1933, ch. 395, and the statute has existed in essentially its present form for some seventy years. See Nelson, 72 Wis. 2d at 409. The provisions at issue in this appeal have been the subject of two prior judicial interpretations that figure prominently in the parties' arguments. The facts of the two prior cases are similar to each other and to those before us now. We begin our own analysis, therefore, by reviewing the facts and analyses in what appear to be two highly relevant and potentially controlling precedents. See State v. Tuescher, 226 Wis. 2d 465, 471, 595 N.W.2d 443 (Ct. App. 1999).

¶ 15. As is in this case, the contractor in Krasin v. Village of Almond, 233 Wis. 513, 290 N.W 152 (1940), did not receive a quotation from a materialman until the morning of bid opening. Id. at 514. He obtained the necessary figure just in time to use it in his bid, and he then "computed the totals of the several items of costs of materials on his adding machine, and carried this total into the final-estimate sheet." Id. Because of a worn ribbon in the adding machine, however, the contractor misread a "6" as "0," and the bid he submitted just before the deadline was $6,000 lower than it should have been. Id. at 514-15. The contractor realized the mistake immediately after bid opening when his bid was $11,000 below the first bid opened. He "immediately went before the [village] board and told them there was a mistake of $5,000 in his additions, and showed them how it happened." Id. at 515. Later that same day, the contractor revised the figure to $6,000 and "presented an affidavit stating how the mistake occurred." Id.

¶ 16. Even with correction, the contractor's bid would have been the lowest submitted, but the board refused to permit the correction and informed the contractor that his original, mistaken bid was accepted. Id. When the contractor refused to proceed for the original bid price, the board declared his $2,000 bid bond forfeited. The contractor sued the village to recover the amount forfeited. Following a bench trial, the circuit court held for the contractor and the village appealed. The supreme court affirmed, concluding that the contractor had met the statutory requirements for correction of mistakes discovered after bids are opened, in that he (1) "immediately and without delay" gave written notice of the mistake, and (2) submitted "clear and satisfactory evidence" that the mistake was not caused by carelessness "in examining the plans specifications, and conforming with the provisions" of the bid statute. Id. at 517-18. The court explained:

Sub. (5) is headed "Corrections of errors in bids." This heading manifestly contemplates that corrections of errors may be made in proper cases, and this would seem to imply that a bid when properly corrected may stand as a bid. Under this concept of the purpose of the statute, the village should under the facts found by the trial court, which are well supported by the evidence, have permitted substitution of the correct amount in the bid.

Id. at 517.

¶ 17. Although the court concluded that the village should have permitted the contractor to correct his bid, the court went on to address the village's contention that the contractor could not recover the forfeited bid bond because the statute required him to prove "that in making the mistake, error or omission he was free from carelessness, negligence or inexcusable negleet," and the contractor had not so proven. Id. at 519. Without specifically addressing whether the showing specified in "the closing part of sub. (5)" was required on the facts before it, the court in its concluding sentences declared that "if ever neglect may be excusable, as the statute manifestly contemplates it may be," the standard had been met on the record before it. Id.

¶ 18. The court revisited the bid correction statute thirty-six years later in Nelson, Inc. v. Sewerage Commission of Milwaukee. The low bidder in Nelson, as in Krasin and this case, suspected it had made a mistake in its bid immediately after the bids were opened. Nelson, 72 Wis. 2d at 404-05. The contractor, however, did not immediately notify the commission of any errors. Rather, it was not until two weeks had passed, and the contractor had discovered a series of "cost omissions" totaling over $378,000, that a written notice of the errors was provided to the commission. Id. A meeting between the contractor and commission representatives followed, but the commission refused the contractor's request "to amend the . . . hid to correct the errors." Id. at 405. Instead, the commission voted some two months after bid opening to accept the original bid. The commission then formally notified the contractor that it had been awarded the contract but the contractor refused to execute it, triggering a bid bond forfeiture. Id.

¶ 19. The contractor sued the commission for return of its $50,000 bid deposit. Id. at 406. The trial court found that the contractor had not given the commission timely notice of the errors in its bid, and further that the errors were the result of carelessness, negligence and inexcusable neglect. Id. The supreme court disagreed on the first point, concluding that the contractor had given notice "immediately and without delay" within the meaning of the statute upon its discovery of the cumulative mistakes which, in its judgment, rendered it unable to perform the contract as bid. Id. at 409-12. On the "inexcusable neglect" issue, however, the supreme court agreed with the trial court that the contractor had come up short in its proof. Id. at 413-17.

¶ 20. Concluding the statute provided that "the bidder should not be relieved of the consequences of his mistake where that mistake is due to his failure to exercise ordinary care in the preparation of the bid," id. at 414, the court held that the contractor's conduct was not excusable. It noted that "[a]ll of the errors discovered in the bid involved work to be performed by the plaintiff and none were attributable to portions of the bid prepared by the subcontractors." Id. at 415. The court quoted the contractor's principal as characterizing four of the omissions as "neglectful," and the fifth and largest error as a "mental mistake." Id. at 416. Distinguishing the Nelson facts from those in Krasin, the court concluded that the record before it supported the trial court's determination that the contractor had failed "to exercise ordinary care in the preparation of the bid," noting further that an "essential condition of equitable relief is the bidder's freedom from negligence in the preparation of its bid." Id. at 417.

¶ 21. Finally, and of particular significance to the present dispute, the court rejected the contractor's suggestion that the commission had wrongfully declared a forfeiture, explaining as follows:

Section 66.29(5), Stats., is labeled "Corrections of Errors in Bids," thereby indicating a legislative intent that bids might be amended under certain circumstances. It is clear from the statute, however, that an amendment is not a matter of right. A bidder has no absolute right to withdraw or amend a bid for a public contract and the governmental body could not be compelled to allow an amendment. Where the governmental body has refused to allow an amendment and has chosen instead to award the contract upon the bid as submitted, the bidder's sole remedy is to proceed under sec. 66.29(5). Where the requirements of that statute are not met, the bidder cannot-recover.

Id. at 418 (footnote omitted).

¶ 22. The department relies on the foregoing passage from Nelson in arguing that, contrary to the trial court's interpretation, Wis. Stat. § 66.0901(5) really has only two parts, one applicable to bid errors discovered prior to bid opening and another applicable to errors discovered post-opening. In the department's view, whenever a governmental body is first notified of a bid error after bids are opened, it may refuse to permit amendment of the bid, proceed to award the contract on the original bid and declare the bid bond forfeited if the contractor refuses to perform. This is so, according to the department, even if the bidder shows that the error "was not caused by any careless act or omission on the bidder's part in the exercise of ordinary care in examining the plans or specifications," i.e., the "second part" of § 66.0901(5). The department concedes Cape satisfied this requirement on the present facts.

¶ 23, In short, the department maintains that, under the holding in Nelson, a bidder must always prove its exercise of ordinary care in the preparation of the bid in order to avoid a forfeiture for submitting a bid containing an error. The department asserts that Krasin also implicitly supports this interpretation of Wis. Stat. § 66.0901(5) because the court proceeded to address the "inexcusable neglect" standard even after it had determined that the contractor in that case had satisfied the second part of the statute.

¶ 24. In response, Cape argues that, if all bidders who discover and give notice of errors in their bids post-opening must show their freedom from "carelessness, negligence or inexcusable neglect," the second part of the statute "would have no independent meaning." Cape asserts that, under the plain language of the statute, the "inexcusable neglect" inquiry applies only when the bid error "causes a forfeiture." In Cape's view, that can only occur if a governmental body awards a contract on an erroneous bid, which, Cape claims, the body cannot do when a bidder has satisfied the second part of the statute. Put another way, Cape argues that, under the plain language of the statute, if a contractor notifies the department immediately after bid opening of an error that stems from other than carelessness in examining plans and specifications or conforming with the statute, the contractor is entitled to correct its bid and the department cannot in good faith award the contract on the erroneous bid and thereafter declare a forfeiture for nonperformance.

¶ 25. Cape asserts that neither Krasin nor Nelson precludes our adopting its (and the trial court's) interpretation of Wis. Stat. § 66.0901(5). It contends that the discussion of inexcusable neglect in Krasin was dicta, given that the supreme court expressly held that the village should have permitted the contractor to correct his bid instead of awarding the contract on the erroneous bid and declaring a forfeiture. See Krasin, 233 Wis. at 517. Support for Cape's position may be found in an attorney general's opinion that analyzed the bid correction statute in light of the holding in Krasin (but before Nelson):

It is apparent from Krasin that if an apparent low bidder, who discovers his error after bids are opened, gives proper notice of his mistake and submits "clear and satisfactory evidence of such mistake and that it was not caused by his carelessness in examining the plans, specifications, and conforming with the provisions of [sec. 66.29]," the governmental entity requesting the bids should allow the bidder to correct his bid. Normally, if the bid is otherwise in order and still remains the low bid after the adjustment necessary to correct the mistake, the bid should be accepted.

62 Op. Att'y Gen. 144, 148 (1973).

¶ 26. As to Nelson, Cape argues that it is distinguishable because the contractor in that case "was seeking the recovery of a forfeiture," while here Cape seeks to avoid one. We reject the attempted distinction because Cape, like the contractor in Nelson, is seeking to avoid the forfeiture of an amount posted or promised as a bid bond. The sequence of events in this case was the same as in Nelson (and in Krasin for that matter): contractor submits bid containing an error; bids are opened; error is discovered; government body is notified; and government refuses contractor's request to amend or withdraw bid, awards contract on original bid and declares a forfeiture for nonperformance. Who controlled the sum posted or promised as a bid bond at the moment Cape commenced suit does not alter the fact that the department had declared a forfeiture from which Cape sought relief.

¶ 27. But for the supreme court's analysis and holding in Nelson, we would embrace the interpretation proffered by Cape and adopted by the trial court. To us, it is the more reasonable interpretation of the plain language of Wis. Stat. § 66.0901(5). It also comports with the supreme court's primary rationale for the result reached in Krasin and with the attorney general's 1973 interpretation. By enacting the statute in question, the legislature plainly intended to permit contractors to be relieved from the consequences of bid errors under certain circumstances. See Nelson, 72 Wis. 2d at 418. The language and structure of the statute seems to evince an intent that the circumstances justifying relief from an erroneous bid vary according to when a contractor gives notice of the error: prior to bid opening, after opening but before an award, or after a contract has been awarded.

¶ 28. Under the first part of the statute, a contractor who gives notice of an error before bids are opened may simply withdraw the bid, essentially with no questions asked. The only penalty for pre-opening error notification is disqualification from further bidding (unless the contract is readvertised and relet). Wis. Stat. § 66.0901(5). Once bids are opened, however, a contractor must give notice of any error "immediately and without delay," and must submit "clear and satisfactory evidence" of the nature of the error and that its cause was not carelessness with respect to examination of plans and specifications or conformance with the statute. Id. Although the statute is silent regarding what should happen if a bidder satisfies these requirements, a reasonable interpretation is that the bidder should be allowed to correct the error before a contract is awarded, as the supreme court in Krasin, the attorney general in 1973 and the trial court in this case have all concluded.

¶ 29. The third part of the statute begins with the words, ”[i]f the discovery and notice of a mistake, omission or error causes a forfeiture." This language strongly suggests that the additional requirement of proving freedom from "carelessness, negligence or inexcusable neglect" should only come into play if notice of an error is first given by the successful bidder after it has been awarded the contract. We conclude, however, that the supreme court's analysis in Nelson precludes us from reading the statute in this fashion. As we have explained, the bidder in Nelson gave notice of the errors before it was awarded the contract, and the supreme court concluded that the bidder had "exercised the diligence required by the statute both in searching its bid for errors and in giving notice of those errors." Nelson, 72 Wis. 2d at 412. Although the court did not expressly state its conclusion that the bidder had provided satisfactory evidence that the error had not been caused by carelessness in examining plans or specifications or conforming with the statute (i.e., the remainder of the "second part" of the statute), the court's subsequent description of the errors suggests this was the case.

¶ 30. Notwithstanding the court's conclusion in Nelson regarding the bidder's compliance with the second part of the statute, the court, in the very next sentence of the opinion said this: "However, under [Wis. Stat. §] 66.29(5). . . the plaintiff is not entitled to recover the deposit unless the mistakes in its bid were shown not to have been due to its 'carelessness, negligence or inexcusable neglect.'" Nelson, 72 Wis. 2d at 413. Thus, even though notice of the error had been given prior to the commission's awarding of the contract, the court deemed the inexcusable neglect standard to apply, implicitly ratifying the commission's actions in refusing the contractor's request to amend its bid, awarding the contract on the original bid and declaring a forfeiture of the bid bond. Although the analysis in Krasin may be read to suggest otherwise, the court's analysis and holding in Nelson cannot be read in any way other than to require a contractor in Cape's position to meet the showing of freedom from "carelessness, negligence or inexcusable neglect" required by the third part of Wis. Stat. § 66.0901(5).

¶ 31. We thus turn to the question of whether Cape made the required showing. On this issue, too, Krasin and Nelson do not mesh well. The court said this in Krasin about the "carelessness, negligence or inexcusable neglect" standard:

The three terms last above appearing as applied to the instant facts are synonymous. "Carelessness" consists of the doing of some act or omitting to do some act. So as to negligence. The "carelessness" or "negligence" here involved, if any there was, consists of an omission to do some act. The "neglect" involved if any there was, consists of that same omission. The "carelessness" or "negligence," if any, was thus only "neglect." The only neglect that under the statute visits the penalty of forfeiture is "inexcusable neglect."... [U]nless the plaintiffs "neglect," if any there was, was "inexcusable" there was no forfeiture under the language of sub. (5) relied on as creating a forfeiture, and if such neglect did not create a forfeiture because it was excusable, neither did carelessness or negligence which consisted of the same thing as neglect.

Krasin, 233 Wis. at 519.

¶ 32. Perhaps sensing that the foregoing explanation might not prove helpful in all cases, the court quoted and attempted to clarify it in Nelson:

In Krasin the court construed the statute to hold the terms "carelessness, negligence or inexcusable neglect" are synonymous. The clear meaning of the statute is that the bidder should not be relieved of the consequences of his mistake where that mistake is due to his failure to exercise ordinary care in the preparation of the bid. As it is used in the statute, "neglect" should include omission or oversight. An omission or oversight which results in a forfeiture is inexcusable where it is due to the bidder's failure to exercise ordinary care. The statute cannot reasonably be read to require, as the plaintiff seems to contend, that any negligence must also be found to be "inexcusable." By definition, negligence or carelessness is conduct which is inexcusable under the circumstances.

Nelson, 72 Wis. 2d at 414-15.

¶ 33. We are not convinced that the court succeeded in its attempt in Nelson to clarify the statutory standard. The department argues that the court essentially held in Nelson that all negligence or carelessness is inexcusable, and because the error in Cape's bid stemmed from some level of carelessness on the part of Cape's bid team personnel, Cape cannot recover its bid bond. Cape counters that, if any degree of negligence in bid preparation must be deemed inexcusable, then Wis. Stat. § 66.0901(5) serves no purpose whatsoever because "it only applies when there is in fact an error." We agree with Cape that the supreme court's discussion in Krasin indicates that some instances of "neglect" (which the court found synonymous with "carelessness" and "negligence" on the facts before it, see Krasin, 233 Wis. at 519; Nelson, 72 Wis. 2d at 414) can indeed be deemed "excusable." And, we conclude further that, because the supreme court did not overrule Krasin but quoted and distinguished it in Nelson, some omissions on the part of a bidder, although representing some degree of carelessness, negligence or neglect, may still be excusable.

¶ 34. Thus, in our view, the discussions in Krasin and Nelson of the terms utilized in the statutory standard are not helpful in determining whether Cape met the standard on the present record. We will therefore focus our attention instead on the nature of the errors in the two cases, one of which the supreme court found to be excusable and the other not.

¶ 35. The error in Krasin was the inclusion of a "0" instead of a "6" in a cost figure on the final estimate sheet, an error which "occurred by reason of the ribbon in the adding machine being worn." Krasin, 233 Wis. at 514-15. The court had no difficulty declaring that any "carelessness, negligence or neglect" associated with the contractor's omission was "excusable." Id. at 519. The unspecified omission the court had in mind was perhaps the contractor's failure to ensure his adding machine was in good working order for the important business at hand; or perhaps it was his failure to double check the figures on a second machine or by hand if necessary; or perhaps it was simply a failure to implement some other type of quality-assurance mechanism to catch errors of this type prior to bid submission. Although the court did not employ these terms, we would characterize the Krasin error to have been "mechanical" or "clerical" in nature, as opposed to an error involving a lapse in the exercise of professional judgment.

¶ 36. The errors in Nelson, by contrast, were clearly of the latter variety, and they appear to have occurred at a much earlier point in the bid preparation process. Certain cost items were simply overlooked, or their costs were miscalculated, and the contractor himself characterized the errors as consisting of "neglectful omissions" and a "mental mistake." Nelson, 72 Wis. 2d at 416. In contrast to Krasin, where it found "excusable neglect," the court determined the errors in Nelson were inexcusable because they were "due to the plaintiffs failure to exercise ordinary care in the preparation of the bid." Id. at 417.

¶ 37. We conclude the present facts are much closer to those in Krasin than to those in Nelson. It is undisputed that the sole error committed by Cape was its failure to incorporate a last-minute price increase transmitted by one of its subcontractors during the final hour of bid assembly. The error had nothing to do with a misjudgment or omission in determining the cost of items necessary to the bid. We conclude therefore that, based on the similarity of the present facts to those in Krasin, any carelessness, negligence or neglect on Cape's part was excusable within the meaning of Wis. Stat. § 66.0901(5).

¶ 38. The department argues, however, that the fact that two other contractors who received the same subcontractor's price revision at about the same time were able to include the revised figure in their final bids indicates that Cape's failure to do likewise was inexcusable. The department contends that because "Cape had both the time and opportunity to make the change on the final bid proposal," it cannot recover. We disagree. The department points to no specific lapses in procedure, staffing or knowledge on Cape's part. We do not suggest that a bid recipient bears the burden of proving specific departures from "ordinary care" in order to prevail in a forfeiture recovery action. The statute plainly places the burden to establish the lack of carelessness, negligence or inexcusable neglect on the bidder seeking to avoid forfeiture. Our point is simply that the department has not called to our attention any indication in the present record that the personnel and procedures employed by Cape to prepare and submit its bid were deficient in any specific regard.

¶ 39. To be sure, someone involved in the final stages of the preparation and verification of Cape's bid could have (and perhaps "should have") caught the error in question prior to bid submission, just as the contractor in Krasin might have discovered his error in reading the adding machine tape before bid opening instead of immediately after. This does not mean, however, that Cape's procedures for final bid preparation and submission represented a failure on its part to exercise "ordinary care," let alone a lapse that is "inexcusable" within the meaning of the statute. Cf. Department of Regulation & Licensing v. Medical Examining Bd., 215 Wis. 2d 188, 198-202, 572 N.W.2d 508 (Ct. App. 1997) (noting that an error may occur even when a physician conforms to the appropriate standard of care; and although an "average" physician would not have made the error, the error does not necessarily equate to negligence).

¶ 40. We therefore affirm the appealed order on the alternate grounds cited by the trial court — that Cape satisfactorily established in the summary judgment record its freedom from "carelessness, negligence or inexcusable neglect." We note in closing that the department has also advanced a public policy rationale for overturning the trial court's order. The department asserts in the conclusion of its opening brief:

To condone Cape's oversight here could open the door to fraud, collusion, favoritism and improvidence in the administration of public business, and it would do nothing to discourage slipshod bidding practices. If the bar is lowered here to such a level as to allow relief due to inexplicable errors such as the one made by Cape, any bidder would be able to change a bid and/or recover a bid bond. Allowing Cape to recover based on inexplicable mistake could leave the public vulnerable to questionable bidding practice.
. . . Mistakes are made, there is no doubt. The fact is the public should not bear the consequences for these mistakes. The public is entitled to receive the services contemplated by the contract at the lowest cost available.

¶ 41. In response to the department's policy argument, we first note that our decision does not rest on public policy grounds but on our best effort to apply the language of Wis. Stat. § 66.901(5), as it has been interpreted and applied in Krasin and Nelson, to the facts before us. Moreover, we agree with the department that the overriding purpose of public bidding statutes is to ensure that taxpayer-funded construction projects are completed in a cost-effective manner, free from "fraud, collusion, favoritism and improvidence." Our disposition does not contravene that purpose, however, inasmuch as the department concedes that Cape was not a "dishonest bidder," and that Cape did nothing "more serious than act carelessly when it failed to ensure its bid was accurate."

¶ 42. Finally, we observe that the supreme court has concluded the legislature plainly intends to allow the correction of some types of bid errors that are not discovered until after bids are opened. See Nelson, 72 Wis. 2d at 418. We fail to see how permitting a public body to seize on a clerical error to obtain a contractor's work for a sum that is arguably below the lowest cost available serves the purpose of Wis. Stat. § 66.0901. In fact, upholding a forfeiture on facts such as those before us might just as easily thwart the purpose of the statute by discouraging honest, efficient and capable contractors from bidding on public contracts for fear of the drastic consequences of an inadvertent error. Alternatively, permitting bid bond forfeitures on facts such as these might lead all public bidders to submit higher bids than necessary in order to guard against that possibility.

¶ 43. Because of the public policy implications noted above, and because the precedents we have relied on are several decades old and not easily reconciled, we encourage the supreme court to accept review of our decision if the department requests it. Public bodies and contractors, as well as the courts of our state, would benefit from additional direction and guidance in determining which post-opening bid errors are entitled to correction under Wis. Stat. § 66.0901(5) and which are not.

By the Court. — Order affirmed.

       All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted. Wisconsin Stat. § 66.0901(5) is quoted in full at ¶ 7 of this opinion.

       The parties appear to use the term "bid bond" interchangeably with "proposal guaranty [or guarantee]," and we will do likewise in this opinion. The department explains in its brief that the State of Wisconsin Standard Specifications for Highway and Structure Construction require all bids for highway work to be accompanied by a "proposal guaranty." Section 103.7 of the Standards provides that if a successful bidder fails to execute a tendered contract within fifteen days of notice of the award of the contract, "at the discretion of the Administrator," the failure can be deemed "just cause for the annulment of the award and the forfeiture of the proposal guaranty to the State, not as a penalty but in payment of liquidated damages sustained as a result of such failure."

       The legislature renumbered Wis. Stat. § 66.29(5) (1997-98) as Wis. Stat. § 66.0901(5) (1999-2000). See 1999 Wis. Act 150, § 331. The recodification act made minor language changes in the subsection at issue, id. (see footnote 9), and it took effect on January 1, 2001, id. at § 674. Neither party argues that the 1999 Act made any substantive change in the statute relevant to this appeal. Accordingly, as the parties have done, we refer to and quote the present language of Wis. Stat. § 66.901(5) (2001-02), but deem precedents interpreting the former § 66.29(5) as relevant to the present dispute.

       We noted in State v. Tuescher, 226 Wis. 2d 465, 595 N.W.2d 443 (Ct. App. 1999), that "[glenerally, when we encounter an ambiguity in the language of a statute, we endeavor to interpret it in light of the statute's scope, legislative history, context, subject matter and purpose," but prior judicial interpretations may also "illuminate . . . facets of the statute and provide the proper interpretation." Id. at 471.

       The statute applied in Krasin v. Village of Almond, 233 Wis. 513, 290 N.W. 152 (1940), and in Nelson, Inc. v. Sewerage Comm'n of Milwaukee, 72 Wis. 2d 400, 241 N.W.2d 390 (1976), was Wis. Stat. § 66.29(5), the predecessor of Wis. Stat. § 66.0901(5), containing nearly identical wording. See footnote 3.

       See footnotes 5 and 3.

       The department acknowledges in its brief that "the fact that Cape's mistake did not involve examining the plans and specifications was never an issue. Cape's mistake involved its failure to record in its bid an accurate quotation from one of its subcontractors."

       Cape argues that no "forfeiture" actually occurred in this case because it and its surety refused to tender $100,000 to the department before Cape filed suit. We agree with the department, however, that our disposition cannot turn on the fact that Cape "was able to avoid turning over the money after the State declared a forfeiture."

       We note that prior to the 1999 renumbering of the bid correction statute, the "third part" of the statute was not a separate sentence. Prior to the enactment of 1999 Wis. Act 150, the relevant portion of the statute read as follows:
      In case any bidder shall make an error or omission or mistake and shall discover the same after the bids are opened, the bidder shall immediately and without delay give written notice and make known the fact of the mistake, omission or error which has been committed and submit to the municipality, board, public body or officers thereof, clear and satisfactory evidence of the mistake, omission or error and that the same was not caused by any careless act or omission on the bidder's part in the exercise of ordinary care in examining the plans, specifications, and conforming with the provisions of this section, and in case of forfeiture, shall not be entitled to recover the moneys or certified check forfeited as liquidated damages unless it shall be proven before a court of competent jurisdiction in an action brought for the recovery of the amount forfeited, that in making the mistake, error or omission the bidder was free from carelessness, negligence or inexcusable neglect.
      Wis. Stat. § 66.29(5) (1997-98) (emphasis added). It could be argued that by creating a new sentence and replacing "and in case of forfeiture" with "[i]f the discovery and notice of a mistake, omission or error causes a forfeiture," the legislature clarified its intent to demark a separate requirement applicable only to mistakes discovered post-award. As we have noted, however (see footnote 3), Cape does not argue that the 1999 Act effected any substantive change in the statute, or that the interpretations of the former statutory language in Krasin and Nelson are inapplicable to the statute as presently worded. Accordingly, we do not address these possibilities.

       The errors in Nelson involved the contractor's failure to include several cost items in its bid and the improper calculation of the cost of another item. Nelson, 72 Wis. 2d at 415-16. The court's description of the errors gives no indication that it deemed the errors to have stemmed from a careless examination of the plans or specifications.

       This court has arguably read Nelson in this way on at least one prior occasion. In deciding whether a contractor was entitled to arbitration of a contract dispute involving an "understated" bid price, we concluded that Wis. Stat. § 66.0901(5) was not applicable once performance of a contract has begun. Village of Turtle Lake v. Orvedahl Constr., Inc., 135 Wis. 2d 385, 388-90, 400 N.W.2d 475 (Ct. App. 1986). In our discussion, we identified "three situations" contemplated by the statute, the second of which was "when the bidder discovers its error after bids are opened." Id. at 388-89. We said that a bidder might then withdraw its bid before forfeiture of its bond but only "if it shows the public body that carelessness did not cause the error." Id. at 389. Later in the opinion, we cited Nelson for the proposition that "where a public body has refused to allow an amendment and has chosen to award the contract on the bid submitted, the bidder's sole remedy is to proceed under [Wis. Stat. § 66.0901(5)]." Id. at 390-91.

       The department argues that "multiple portions" of an affidavit submitted by the Cape employee who was responsible for and supervised the preparation of the erroneous bid are "inadmissible." It moved the trial court to strike the affidavit, which the court declined to do. We have reviewed the portions of the affidavit which the department finds objectionable for, among other things, being conclusory or lacking in personal knowledge or proper foundation. While some of the department's objections may have merit, the affidavit also provides relevant, material and admissible facts regarding the transaction at issue. For example, the affiant acknowledges that he received the revised cost figure from Zenith "approximately twenty minutes before the bid submittal time," that he made a note of the change on a "Schedule sheet," and that "Cape's bid was submitted on disk without the change." As we have noted, the department does not dispute the fact that the error in Cape's bid resulted solely from its failure to incorporate an increased cost figure from Zenith which Cape personnel received during the final hour before the bid deadline. We do not rely in our de novo review of the summary judgment record on anything in the challenged affidavit beyond these facts. Accordingly, we see no need to address whether other portions of the affidavit do not meet the standard for summary judgment submissions.

       The court described the error thus:
      There is no doubt, as the court found, that there was an error of $6,000 in the plaintiffs bid, which arose from the plaintiffs misreading an adding-machine slip recording a total wherein a faint figure "6" in the thousand column of the total was read as "0," and was carried into the total of the bid, making the bid $20,501.57, instead of $26,501.57.

        Krasin, 233 Wis. at 516. The court also noted the fact that the contractor completed his bid in the final hours before the deadline because he had received a final cost figure from a materialman just that morning. Id. at 514.


source: Caselaw Access Project

author: CANE, C.J.

license: Public Domain

text:
    William L. Genrich and Frances L. Genrich, Plaintiffs-Appellants, v. City of Rice Lake, Defendant-Respondent.
    Court of Appeals

      No. 03-0597.

      Submitted on briefs October 6, 2003.

      Decided November 11, 2003.

    2003 WI App 255
    (Also reported in 673 N.W.2d 361.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Joe Thrasher of Thrasher, Doyle, Pelish & Franti, Ltd. of Rice Lake.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Frederick W. Fischer of Weld, Riley, Prenn & Ricci, S.C. of Eau Claire.
    Before Cane, C.J., Hoover, PJ, and Peterson, J.
   CANE, C.J.

¶ 1. The City of Rice Lake levied a $44,612.25 special assessment against property owned by William and Frances Genrich. The assessment was for improvements the City made that included paving a street and installing sidewalks, curbs, gutters, and water and storm sewers. The Genrichs challenged the assessment and the circuit court granted summary-judgment to the City. The Genrichs appeal, arguing (1) the circuit court must first determine whether the nature of improvements is general or local before it considers the propriety of the special assessment, (2) the City's purpose for making the improvement determines its nature, and (3) there are genuine issues of material fact regarding the City's purpose for constructing the improvement. In the alternative, even if the improvement is local, they argue that the assessment was not made on a reasonable basis because their property did not receive any benefits.

¶ 2. We agree with the Genrichs that the initial question to be resolved is what type of improvement was made. However, we conclude that the City's purpose for making the improvements is not solely determinative on this question, but rather is a relevant factor the circuit court must consider in light of the benefits the improvements confer on the property. Because the inquiry into the nature of an improvement presents a question of fact, and because genuine issues of material fact exist regarding the City's purpose for making the improvements and whether the Genrichs' property received any special benefits from them, summary judgment was improper. The City is, however, entitled to partial summary judgment with regard to the special assessment for the value of the sidewalk improvement because benefits need not accrue to the property in order to support the assessment's levy. On remand, if the circuit court decides the other improvements are local, it must then determine whether the special assessment is reasonable based on uniformity and uniqueness concerns. Therefore, we affirm in part, reverse in part, and remand for further proceedings.

Background

¶ 3. In 1997, the Genrichs purchased a two-acre parcel of land in the City of Rice Lake located on Kern Avenue off a T-intersection with South Street. The property included two structures, a residence and an airplane hangar, which were not connected to water or sewer utilities, and a private roadway that spanned the length of the property and provided access to Kern Avenue. The Genrichs' property was zoned residential at the time of purchase but was subsequently rezoned commercial. East of the Genrichs' property is a public park, Moon Lake Park. The park is comprised of several soccer fields and restroom facilities. The City created the park in 1998 from an abandoned airport, and, like the Genrichs' property, this land was not serviced by public utilities. Through a series of land transactions involving properties surrounding the park, the City effectively, though inadvertently, landlocked the park from vehicular traffic.

¶ 4. Faced with several options to provide access to the park's west property line, the City opted to purchase a parcel of land north of the Genrichs' property to construct an extension and improvement of South Street. In the end, the project consisted of a 528-foot paved extension of South Street with curbs, gutters, and sidewalks, along with the installation of public water utilities including sanitary and storm sewers to serve the park and the surrounding properties. In total, six properties were affected by these improvements. By use of its police power, the City levied special assessments against these properties under Wis. Stat. § 66.0703. Using the "front-foot" method for valuation, the City assessed the Genrichs' property $44,612.25.

¶ 5. The Genrichs subdivided their land into two parcels, purportedly to help pay for the special assessment, and appealed the levy to the circuit court pursuant to Wis. Stat. § 66.0703(12). The court granted summary judgment to the City. It concluded the Genrichs' property was benefited by the improvements, both in its current use as a residence and in its potential future use as commercial property, and that the method used to value the special assessments, the front-foot method, was per se reasonable. The Genrichs appeal.

Discussion

¶ 6. When reviewing a summary judgment, we perform the same function as the trial court, making our review de novo. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summary judgment must be entered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Wis. Stat. § 802.08(2). Summary judgment is a drastic remedy; therefore, the moving party must clearly be entitled to judgment as a matter of law. Village of Fontana-On-Geneva Lake v. Hoag, 57 Wis. 2d 209, 214, 203 N.W.2d 680 (1973). We view the facts in the light most favorable to the nonmoving party, State Bank of La Crosse v. Elsen, 128 Wis. 2d 508, 512, 383 N.W.2d 916 (Ct. App. 1986), and "[a]ny doubts as to the existence of a genuine issue of material fact are to be resolved against the moving party." Hudson Diesel, Inc. v. Kenall, 194 Wis. 2d 531, 546, 535 N.W.2d 65 (Ct. App. 1995).

¶ 7. The Genrichs argue that the trial court erred by granting summary judgment to the City because it did not first consider whether the nature of the improvements was general or local. Because special assessments can only be levied for a local improvement, they argue the circuit court erred by beginning its analysis with the correctness of the special assessment. We agree.

¶ 8. Public improvements usually fall into one of two categories: general or local. Duncan Develop. Corp. v. Crestview San. Dist., 22 Wis. 2d 258, 264, 125 N.W.2d 617 (1964). A general improvement is one that confers a general benefit, that is, a "substantially equal benefit and advantage" to the property of the whole community, or benefits the public at large. Id. In contrast, a local improvement, although incidentally beneficial to the public at large, is primarily made for the accommodation and convenience of inhabitants in a particular locality and confers "special benefits" to their properties. Id. The distinction between the two kinds of public improvements holds significant consequences for property owners. Id. at 264-65. General improvements are funded by general taxes and must comply with the rule of uniformity, whereas local improvements may be financed by special assessments levied against individual properties and are not limited by the rule of uniformity. Id. at 264.

¶ 9. Because special assessments can only be levied for local improvements, before the propriety of a special assessment can be addressed the circuit court must initially examine whether the improvement is local. This examination presents a question of fact. See Duncan, 22 Wis. 2d at 265 (It is "difficult to classify improvement abstractly as local or general. . . . What may be called a local improvement under one set of facts may well constitute a general improvement in the context of different facts."); see also Preloznik v. City of Madison, 113 Wis. 2d 112, 118, 334 N.W.2d 580 (Ct. App. 1983) (existence of benefit presents question of fact); 14 McQuillin Mun. Corp. § 38.11 at 83 (3rd ed. 1998) ("[WJhether the facts in a particular case show the improvement to be local or general is a question of fact determinable from the conditions and circumstances.").

¶ 10. The next issue concerns how the circuit court should properly resolve this factual determination. The Genrichs seem to argue the City's purpose for initiating the improvements will determine the nature of the improvement because this purpose will significantly dictate the improvements' effects. The City claims its purpose is not germane. Instead, the City suggests the central query should be on the benefits conferred by the improvements. We disagree with both parties. Taking the middle path, we conclude the City's purpose for making the improvements is relevant to resolving the nature of the improvement, but not determinative because the court must also consider the benefits the property receives.

¶ 11. Purpose is relevant to determining the nature of the improvement because of the manner in which local improvement is defined. Again, a local improvement is a type of improvement primarily made for the accommodation and convenience for inhabitants of a particular locality that grants special benefits to their property. Duncan, 22 Wis. 2d at 264. The phrase "primarily made" connotes that consideration be given to the City's motivations for making the improvements. In so considering, the circuit court must decide what the primary purpose for the improvements was and who the primary objects of that purpose were. Specifically, the City's purpose for initiating improvements must be for reasons of accommodation and convenience (the "what" question), and the object of the purpose must be primarily for the people in a particular locality (the "who" question) for an improvement to fall within the local improvement category. See id.

¶ 12. Our conclusion finds support in McQuillin on Municipal Corporations, where it states: "[I]f [the improvement's] primary purpose and effect are to benefit the public, it is not a local improvement." 14 McQuillin, supra, § 38.11. While this highlights purpose as a relevant and necessary consideration in the examination, it also confirms, contrary to what the Genrichs suggest, that purpose alone is not conclusive. The court must also consider the effect of the improvement by analyzing (1) the type of benefits conferred, and (2) their extent. Id. This consideration should bear the greatest weight. See Duncan, 22 Wis. 2d at 265.

¶ 13. Turning to the type of benefits, while general improvements grant substantially equal benefits and advantages to the property of the whole community or otherwise benefits the public at large, local improvements confer "special benefits" on property in a particular area. Id. at 264. A special benefit has the effect of furnishing an "uncommon advantage" that either increases the services provided to the property or enhances its value. Goodger v. City of Delavan, 134 Wis. 2d 348, 352, 396 N.W.2d 778 (Ct. App. 1986); Duncan, 22 Wis. 2d at 264-65.

¶ 14. An uncommon advantage is a benefit that differs in kind rather than in degree from those benefits enjoyed by the general public. Goodger, 134 Wis. 2d at 352. It has been described as an advantage that "is in addition to that benefit enjoyed by other property owners in the municipality." Id. When evaluating an uncommon advantage grounded upon an alleged increase in services, the accrual of the benefits must be "certain." See Duncan, 22 Wis. 2d at 267-68; Wm. H. Heinemann Creameries v. Village of Kewaskum, 275 Wis. 636, 641, 82 N.W.2d 902 (1957). That is to say, the benefit must not be contingent on unplanned future action by the City. See Heinemann Creameries, 275 Wis. at 641. If the uncommon advantage stems from an enhancement in the property's value, the court must view the benefits and their effect in light of the highest and best possible use of the property. Molbreak v. Village of Shorewood Hills, 66 Wis. 2d 687, 700, 225 N.W.2d 894 (1975).

¶ 15. The extent of the benefits must be substantial and capable of realization in a reasonable amount of time. Estate of Wolff v. Weston Town Bd., 156 Wis. 2d 588, 598, 457 N.W.2d 510 (Ct. App. 1990). A benefit is substantial if it provides more than incidental effects to the property. See Duncan, 22 Wis. 2d at 264. Consequently, a local improvement can incidentally grant general benefits to the public at large or the property of the whole community yet still be local, see id. at 264-65, while a general improvement may incidentally provide special benefits to particular properties and nevertheless remain general. See 14 McQuillin, supra, at § 38.11. Finally, the effect of the benefit must be capable of realization in a reasonable amount of time. Estate of Wolff, 156 Wis. 2d at 598. However, evidence that the property will not be developed in the foreseeable future, or that there is no present use for the improvement, will not prevent a finding of special benefits. Soo Line R.R. Co. v. City of Neenah, 64 Wis. 2d 665, 671-72, 221 N.W.2d 907 (1974).

¶ 16. Applying all of the foregoing principles, and viewing the facts in the light most favorable to the Genrichs, summary judgment was improper. When deciding whether an improvement is general or local, the circuit court must consider the City's purpose for making the improvements. The record contains an inference that the City's purpose was primarily to provide access to the park. In the City's briefing reports, it states "[t]here would seem to be three, primary alternatives for providing street & utility access to Moon Lake Park." The option the City eventually accepted was one described as follows: "Fully improve South Street extended for utility connection and access to Moon Lake Park." This creates an inference that the City's primary purpose for the improvements was not for accommodation and convenience for the surrounding properties. However, in an affidavit the city engineer claims the City's primary motivations for the improvements were twofold. He states the project was undertaken "primarily to serve the adjacent commercially zoned lots and to provide an access and utilities to Moon Lake Park." The opposing inferences create a genuine issue of material fact; summary judgment was improper.

¶ 17. There is also a genuine issue of material fact concerning whether the Genrichs' property received special benefits because of the improvements. The trial court concluded the Genrichs' property was benefited, yet the Genrichs' realtor concluded, in his opinion, that the improvements provided no benefit to this property. He states the property already had vehicular access and possibly already had water utilities, though it was not connected. As a consequence, the improvements conferred a benefit that differs in degree, not in kind, from the rest of the public. See Goodger, 134 Wis. 2d at 352. The realtor further opines the improvements may even be detrimental to its value as commercial property. The City argues at length that this affidavit is insufficient to create a genuine issue of material fact because, from the City's point of view, the opinion is suspect. However, our review in light of the summary judgment methodology prevents us from deciding an issue of fact. See Coopman v. State Farm Fire & Cas. Co., 179 Wis. 2d 548, 555, 508 N.W.2d 610 (Ct. App. 1993). Instead, we "only determine whether a factual issue exists." Id. Because the realtor's opinion cuts to the heart of the matter and creates a genuine issue of material fact, summary judgment was inappropriate.

¶ 18. We do agree with the City, however, that it is entitled to partial summary judgment with regard to the special assessment levied for the sidewalks. Sidewalk improvements represent a special case. The Genrichs' property does not have to receive a.special benefit in order for the City to levy against it. See Wis. Stat. § 66.0907(3)(f); see also Stehling v. City of Beaver Dam, 114 Wis. 2d 197, 201, 336 N.W.2d 401 (Ct. App. 1983) (Wisconsin Stat. 66.615(3) (1983) [now renumbered § 66.0907] contains no express requirement of benefits for a special tax for sidewalk construction).

¶ 19. On remand, should the circuit court nevertheless conclude the nature of the other improvements is local, it must then consider the propriety of the special assessment levied on the Genrichs' property pursuant to the City's police power. The special assessment must pass three legislative requirements. Wis. Stat. § 66.0703(1)(a), but cf. Lac La Belle Golf Club v. Village of Lac La Belle, 187 Wis. 2d 274, 281, 522 N.W.2d 277 (Ct. App. 1994). First, the assessment must be levied upon property in a limited and determinable area. Wis. Stat. § 66.073(1)(a). Second, it must be levied only for the special benefits conferred on the property. Id. Third, if an assessment represents an exercise of the police power, the assessment must have a reasonable basis as determined by the governing body of the city, town or village. Wis. Stat. § 66.073(1)(b).

¶ 20. The parties disagree as to the meaning of the third requirement. The Genrichs suggest it only requires that the assessment be in proportion to the benefits conferred. On the other hand, the City argues it only requires the method used to value the special assessment be reasonable and fair. The municipality board decides which method should be used, and the City seems to argue this is not subject to review by the circuit court. Apart from these two views, the circuit court concluded the assessment was reasonable per se because the City valued the assessment by use of an accepted method, the front-foot method. The reasonableness inquiry is not that simple. We agree with the Genrichs that reasonableness requires the assessment to be in proportion to the benefits conferred. Notwithstanding the fact that the statute seems to place the determination of reasonableness in the hands of the City, the courts have interpreted reasonableness to incorporate a dual analysis: first, uniformity (the exercise of the police power must be reasonable in relation to all affected properties); and second, uniqueness (the results of that exercise on a specific property must be in proportion to the benefits conferred). See Lac La Belle Golf Club, 187 Wis. 2d at 285-86; see also Peterson v. City of New Berlin, 154 Wis. 2d 365, 373, 453 N.W.2d 177 (Ct. App. 1990).

¶ 21. Uniformity requires the assessment to be fairly and equitably apportioned among property owners in comparable positions. Lac La Belle Golf Club, 187 Wis. 2d at 285; Peterson, 154 Wis. 2d at 373. To accomplish this, the municipality must use a method of assessment that produces a uniform and equal value for all affected properties. Lac La Belle Golf Club, 187 Wis. 2d at 285. The non-exhaustive list of methods the City can use include (a) assessed value, (b) front footage, or (c) lump sum assessment. Village of Egg Harbor v. Manner Group, 156 Wis. 2d 568, 572, 457 N.W.2d 519 (Ct. App. 1990). Whatever method is used, it must produce uniform and equal assessment amounts. For this reason, it is unreasonable to use the same method to assess a group of property owners when it results in an entirely disproportionate result that could easily be remedied by using a different method. Peterson, 154 Wis. 2d at 373. In line with this principle, it is also unreasonable to assess one group of property owners by a different method from that used to assess others if the results are entirely disproportionate. Gelhaus & Brost, Inc. v. City of Medford, 144 Wis. 2d 48, 52, 423 N.W.2d 180 (Ct. App. 1988). Thus, there is no such thing as a per se reasonable method.

¶ 22. Finally, the circuit court must consider whether the uniqueness of the circumstances require a reduction in the special assessment. Lac La Belle Golf Club, 187 Wis. 2d at 284-87. An assessment is reasonable in its results when it is in proportion to the benefits conferred. Gelhaus, 144 Wis. 2d at 51-52; Duncan, 22 Wis. 2d at 264. To make this determination, the circuit court must look at the degree, effect, and consequences of the special benefits. Egg Harbor, 156 Wis. 2d at 572; see, e.g., Lac La Belle Golf Club, 187 Wis. 2d at 284-88 (unreasonable assessment where golf course was assessed for local improvement of water mains, but it would cost over a million dollars to reconfigure the golf course if it were to benefit from the improvement). However, because it is undisputed that the City levied the assessment using its police power, the assessment can exceed the monetary value of the benefits conferred. See Wis. Stat. § 66.0703(1)(b).

By the Court. — Judgment affirmed in part; reversed in part and cause remanded. Costs denied to both parties.

       The portion of Kern Avenue south of the intersection apparently is dedicated as Kern Avenue and is paved, but it is not fully improved.

       Wisconsin Stat. § 66.0703 states, in pertinent part:
      (1) (a) Except as provided in s. 66.0721, as a complete alternative to all other methods provided by law, any city, town or village may, by resolution of its governing body, levy and collect special assessments upon property in a limited and determinable area for special benefits conferred upon the property by any municipal work or improvement; and may provide for the payment of all or any part of the cost of the work or improvement out of the proceeds of the special assessments.
      ft)) The amount assessed against any property for any work or improvement which does not represent an exercise of the police power may not exceed the value of the benefits accruing to the property. If an assessment represents an exercise of the police power, the assessment shall be upon a reasonable basis as determined by the governing body of the city, town or village.
      All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       Wisconsin Stat. § 66.0703(12)(a) provides in part:
      A person having an interest in a parcel of land affected by a determination of the governing body ... may, within 90 days after the date of the notice or of the publication of the final resolution .. . appeal the determination to the circuit court of the county in which the property is located.

        Goodger v. City of Delavan, 134 Wis. 2d 348, 352, 396 N.W.2d 778 (Ct. App. 1986), and Estate of Wolff v. Weston Town Bd., 156 Wis. 2d 588, 598, 457 N.W.2d 510 (Ct. App. 1990), dealt with special benefits in the context of the special assessment statute, Wis. Stat. § 66.0703(2). However, because special assessments can only be levied against properties for local improvements, Duncan Develop. Corp. v. Crestview San. Dist., 22 Wis. 2d 258, 264, 125 N.W.2d 617 (1964), and because local improvements require "special benefits," id., it is sensible to incorporate their interpretation of special benefits here.

        Estate of Wolff actually states benefits must be substantial, certain, and capable of being realized within a reasonable amount of time. Id. at 598. However, Wolff relied on Wm. H. Heinemann Creameries v. Village of Kewaskum, 275 Wis. 636, 641, 82 N.W.2d 902 (1957), for this proposition. Heinemann Creameries was distinguished in Duncan. There, the supreme court held that where benefits in the form of enhanced value accrue to property it is not necessary that the benefits be certain, but only that they be substantial and capable of being realized within a reasonable amount of time. See Duncan, 22 Wis. 2d at 267-68. Accordingly, only those benefits that confer an increase in service must be certain. Id. at 268-69.

       Wisconsin Stat. § 66.0907(3)(f) reads:
      The board of public works shall keep an accurate account of the expenses of laying, removing and repairing sidewalks in front of each lot or parcel of land, whether the work is done by contract or otherwise, and report the expenses to the comptroller. The comptroller shall annually prepare a statement of the expense incurred in front of each lot or parcel of land and report the amount to the city clerk. The amount charged to each lot or parcel of land shall be entered by the clerk in the tax roll as a special tax against the lot or parcel of land and collected like other taxes upon real estate. The council by resolution or ordinance may provide that the expense incurred may be paid in up to 10 annual installments and the comptroller shall prepare the expense statement to reflect the installment payment schedule. If annual installments for sidewalk expenses are authorized, the city clerk shall charge the amount to each lot or parcel of land and enter it on the tax roll as a special tax against the lot or parcel each year until all installments have been entered, and the amount shall be collected like other taxes upon real estate. The council may provide that the street commissioner or city engineer perform the duties imposed by this section on the board of public works.

       Special assessments can be levied under either the municipality's taxing or police power. The principle difference between an assessment levied under the police and taxing lies in the dollar amount that can be assessed. If an assessment is levied under the taxing power, the amount assessed cannot exceed the value of the benefits accruing to the property. Wis. Stat. § 66.0703(1)(b). If an assessment is levied under the police power, the amount can exceed the value of the benefits conferred to the property provided this amount has a reasonable basis. Id.

       When a property owner challenges a special assessment, a presumption exists that the city officers proceeded regularly unless the contrary is shown by competent evidence. Soo Line R.R. Co. v. Neenah, 64 Wis. 2d 665, 671, 221 N.W.2d 907 (1974).