Contract – Sale of Recycling Materials – County Ownership – Statutory Bidding Requirement

When the defendant-county sells its own property, the county must follow a statutory bidding procedure. However, there is a genuine issue as to whether the county owns the scrap metal and appliances that its residents deposit into recycler-owned bins at county facilities.

We reverse summary judgment for the county and remand for further proceedings.

Background

From 2015 to 2019, defendant TT&E Iron & Metal, Inc., paid the defendant-county $4 million for the scrap metal and appliances that county residents deposited into TT&E’s bins at county recycling facilities.

In 2019, the county issued a request for proposals for the scrap metal/appliances contract. Plaintiff offered $10 more per ton than TT&E, but the county awarded the contract to TT&E. Plaintiff challenges that award.

Ownership

The county contends that it does not own the scrap metal or appliances deposited by its residents, so the county need not comply with statutory bidding procedures.

The county submitted evidence that (1) the containers into which residents deposit their scrap are supplied by the contractor, not the county and (2) when the scrap is deposited in those containers, “the metal objects sit in a ‘holding pattern’ until the containers become full and the service provider hauls them away for processing and recycling.” Thus, the county argues, the scrap metal never becomes the property of the county. Instead, title to the property passes from its residents directly to the private recycler.

But the county’s solid waste facilities manager, whose deposition testimony established many of these facts, also provided testimony that contradicts the county’s position. For example, the county collects the scrap metal at facilities it owns or leases. The county does not permit the public to access the scrap metal once it is deposited on the facility grounds. And the county takes possession of the scrap metal from residents and later turns it over to the private recycler.

Even if residents intend to abandon the property—that is, relinquish their ownership permanently as they would with other forms of trash—there are fact issues to resolve. Once abandonment takes place, title to the abandoned property passes to the first person who thereafter takes possession. There was testimony that the county not only takes possession of the property but also exercises authority and control over the scrap while it is at the county facilities.

Thus, there are genuine issues of material fact concerning whether the scrap metal is county property.

Service Contract

The county also argues that the contract at issue is one for recycling services, such that it is not subject to the statutory requirements for the sale of county property. However, the bidders were not competing on how much they would charge the county for some service; rather the county’s request for proposal sought bidders for the possible acquisition of county property.

We also reject the county’s argument that we should examine whether the sale of county property or the recycling service is the “predominant purpose” of the contract. This test is used to determine whether contracts are governed by common law or the Uniform Commercial Code. It has no application here. Moreover, any sale of county property falls within the scope of G.S. § 153A-176, regardless of whether the sale of that property is the predominant purpose of the contract governing it.

Reversed and remanded.

Wall Recycling, LLC v. Wake County (Lawyers Weekly No. 012-566-22, 14 pp.) (Richard Dietz, J.) Appealed from Wake County Superior Court (Bryan Collins, J.) William Brian, Jeffrey Roether and Matthew Limoli for plaintiff; Roger Askew, Kenneth Murphy, Claire Hunter Duff, Kenneth Haywood and Joseph Stallings for defendants. 2022-NCCOA-896