## Facts

- The City of Brookings (the City) entered into a competitively bid construction contract with Mills Construction, Inc. (Mills) for a City public project.
- After construction began, the City issued two change orders that added new work to the contract.
- The added work was requested because the City secured tenants earlier than expected and wanted additional build-out completed sooner.
- Mills performed the work required by the change orders, and the City paid Mills for that work.
- Thomas Bozied, a City taxpayer, sued, alleging the change orders violated South Dakota’s competitive-bidding restrictions on change orders, including SDCL 5-18-18.3.
- The circuit court concluded the change orders violated the statute, declared them void, held Mills could not pursue equitable relief, and ordered Mills to refund the amounts paid under the change orders.
- Mills and the City appealed.

## Issues

1. Whether summary judgment was proper on the question whether the change orders complied with SDCL 5-18-18.3 (including whether the added work was based on circumstances not reasonably foreseeable when the contract was let and whether the changes were required to complete the project).
2. Whether a contractor may obtain equitable relief (such as quantum meruit or unjust enrichment) or assert equitable defenses when a public change order is void for failure to comply with mandatory competitive-bidding requirements.
3. If the change orders are void, whether the City may recover all sums it already paid to the contractor, or whether the contractor may retain payments absent fraud, collusion, or undue influence.

## Decision

- The South Dakota Supreme Court affirmed in part, reversed in part, and remanded.
- The court held that compliance with SDCL 5-18-18.3 depends on factual determinations (including foreseeability and whether the added work was required to complete the project), making summary judgment improper where material facts were disputed.
- The court agreed that when a public contract modification is void for violating mandatory bidding laws, equitable remedies and equitable defenses are not available to validate the unlawful arrangement or create a right to recover for the extra work.
- The court reversed the portion of the judgment requiring Mills to refund all sums already paid; if the change orders are ultimately found void, Mills may retain payments already received absent fraud, collusion, or undue influence, consistent with leaving parties to an illegal contract where they are found.

## Legal Principles

- SDCL 5-18-18.3 restricts public-project change orders to limited circumstances, including changes tied to conditions not reasonably foreseeable at the time of bidding and changes required to complete the project.
- Whether a change order satisfies SDCL 5-18-18.3 commonly turns on disputed facts and may not be resolved by summary judgment when the record supports competing inferences.
- Mandatory public competitive-bidding statutes protect the public, and courts will not use equitable doctrines to enforce, validate, or award recovery on a public contract or change order that is void for noncompliance.
- Even when a public contract or change order is void, restitution of payments already made is not automatic; absent fraud, collusion, or undue influence, courts may leave the parties where they are found and permit the contractor to keep amounts already paid for work performed.

## Conclusion

Bozied held that the legality of the City’s change orders under SDCL 5-18-18.3 could not be decided on summary judgment because it depended on disputed facts, reaffirmed that equity cannot supply recovery or defenses on void public change orders, and limited the City’s ability to claw back payments by allowing the contractor to retain sums already paid absent misconduct.


Bozied v. City of Brookings, 638 N.W.2d 264 (2001)