Guam Imaging Consultants Inc v Guam Memorial Hospital Authority [2004] GUSC 14; 2004 Guam 15 (12 August 2004)

IN THE SUPREME COURT OF GUAM

GUAM IMAGING CONSULTANTS, INC., and RADS,
a General Partnership,
Plaintiffs-Appellants,

v.

GUAM MEMORIAL HOSPITAL AUTHORITY and
GUAM RADIOLOGY CONSULTANTS, INC.,
Defendants-Appellees.

Supreme Court Case No.: CVA03-020
Superior Court Case No.: CV0798-03

OPINION

Filed: August 12, 2004

Cite as: 2004 Guam 15

Appeal from the Superior Court of Guam
Argued and submitted on February 27, 2004
Hagåtña, Guam

Appearing for Plaintiffs-Appellants: Thomas M. Tarpley, Jr., Esq. TARPLEY & MORONI, LLP American Life Bldg. 137 Murray Blvd., Ste. 201 Hagåtña, GU 96910-5104

For Defendant-Appellee Guam Memorial Hospital Authority: Seth Forman, Esq. BERMAN O=CONNOR MANN & SHKLOV Suite 503, Bank of Guam Bldg. 111 Chalan Santo Papa Hagåtña, GU 96910 For Defendant-Appellee Guam Radiology Consultants, Inc.: William L. Gavras, Esq. LAW OFFICES OF GORMAN & GAVRAS, P.C. 2nd Flr., J & R Bldg. 208 Route 4 Hagåtña, GU 96910

BEFORE: F. PHILIP CARBULLIDO, Chief Justice; FRANCES M. TYDINGCO-GATEWOOD, Associate Justice; RICHARD H. BENSON, Justice Pro Tempore.

CARBULLIDO, C.J.:

[1] This interlocutory appeal arises from a civil action involving a procurement protest. Plaintiffs-Appellants RADS (ARADS@) and Guam Imaging Consultants, Inc., (AGIC@) appeal the trial court=s denial of their motion to enforce the automatic stay provision of the Guam Procurement Law.[1] We hold that the trial court erred in its denial of the motion.

[2] However, we find that the trial court failed to address the jurisdictional issue of RADS and GIC=s standing and therefore remand for the trial court=s consideration of the standing issue. If the trial court determines that RADS and GIC have standing, proceedings shall continue consistent with this opinion. If the trial court determines that RADS and GIC do not have standing, the trial court shall dismiss the case for lack of jurisdiction.

I.

[3] On February 4, 2003, the Guam Memorial Hospital Authority (AGMHA@) issued a Request for Proposals (ARFP@) to procure professional radiology services. Guam Radiology Consultants, Inc., (AGRC@), RADS and a third entity submitted proposals. The introductory paragraph of RADS= proposal stated as follows: AThis proposal to provide radiology services for Guam Memorial Hospital Authority (GMHA) is submitted from a group of Guam-based radiologists. The radiology services contract, if awarded, will be administered through a Guam corporation (RADS) to be formed by the radiologists.@ Appellee GMHA=s Supplemental Excerpts of Record, p. 33 (RADS= Proposal for Radiology Services). The body of the proposal stated that RADS consisted of six radiologists identified by name as Drs. Hoffman, Mudd, Lizama, Itow, Briterman and Kwok. Three of the named individuals, Drs. Hoffman, Mudd and Lizama, were named on the signature page, although only Philip Manly signed the proposal, and did so as the Managing Director of RADS.

[4] On or about March 21, 2003, based on review and assessment of their respective proposals, GMHA selected GRC as the most qualified offeror, ranked RADS as the second most qualified offeror, and ranked the third and final offeror as the third most qualified offeror. On April 26, 2003, Philip Manly submitted a protest to GMHA on behalf of RADS regarding the methods used by GMHA in its selection of GRC as the most qualified offeror. RADS later abandoned its April 26, 2003 protest.

[5] On May 6, 2003, RADS sent a letter to GMHA regarding call scheduling at the Hospital. The letter was signed by Drs. Hoffman, Mudd and Lizama. On May 12, 2003, another letter was sent to GMHA from RADS regarding the call schedule. The May 12 letter identified Drs. Hoffman, Mudd, Lizama and Itow as members of RADS but was only signed by Dr. Hoffman.

[6] On May 14, 2003, GMHA Administrator William I. McMillan (AMcMillan@) issued a memorandum on behalf of GMHA discussing a sole source interim agreement it had entered into with GRC, the most qualified offeror in the solicitation for professional radiology services, pending finalization of a two-year exclusive radiology services contract it was negotiating with GRC pursuant to the RFP.

[7] On May 16, 2003, counsel for Dr. Hoffman and RADS submitted a protest letter to GMHA regarding the contents of its May 14, 2003 memorandum. The letter protested both the sole source interim agreement and the purported Aexclusive@ nature of the contract being negotiated between GMHA and GRC.

[8] On May 22, 2003, McMillan wrote to RADS and indicated that GMHA was in receipt of its May 16 protest. McMillan further stated that he believed that GMHA had not violated any of its procedures and questioned RADS= standing to make a protest.

[9] On May 22, 2003, McMillan also appeared before the GMHA Board of Trustees and recommended that the two-year radiology contract be awarded to GRC. He explained that a protest was underway but that GMHA had evaluated the protest and determined that the protester did not have standing. The Board of Trustees awarded the contract to GRC by unanimously passing a motion to approve Official Resolution #03-055 entitled ARelative to the Awarding of an Exclusive Contract for Professional Radiology Services.@ Appellee GMHA=s Supplemental Excerpts of Record, p. 55 (GMHA Board of Trustees minutes & VI.D. (May 22, 2003)).

[10] On May 23, 2003, counsel for Dr. Hoffman and RADS wrote to McMillan and lodged an additional protest regarding the May 22, 2003 actions of the Board of Trustees. Further, the May 23 letter stated that if McMillan=s letter of May 22 regarding the May 16 protest was meant to be a denial of the May 16 protest letter, such was insufficient as a denial pursuant to applicable law.

[11] On June 2, 2003, McMillan issued a memorandum concluding that award of the contract without delay was necessary to protect substantial interests of GMHA.

[12] On June 5, 2003, RADS and GIC filed their civil action in the court below regarding RADS= protest letter of May 16, 2003 followed by their filing of an amended complaint on June 6, 2003. The amended complaint stated that APlaintiff RADS, at all times material hereto, was a General Partnership of licensed physician-radiologist[s] on the medical staff of Guam Memorial Hospital with clinical privileges in radiology,@ and that A