Los Alamitos Unified School District v. Howard Contracting, Inc.

Introduction

The primary issue presented by this appeal is a legal one: Does Education Code section 17406 exempt school districts from obtaining competitive bids when entering into what are known as “lease-leaseback” agreements to improve school property? We conclude the answer is yes. More than 40 years ago, the California Attorney General concluded the language of the statute is plain, unambiguous, and explicit, and does not impose bid requirements on school districts. We agree, and nothing has occurred in the interim that would change our conclusion.

Los Alamitos Unified School District (the District) filed an action to validate its lease-leaseback agreement with a contractor performing improvements on the track and athletic field of the District’s high school. Another contractor, Howard Contracting, Inc. (Howard), filed an answer, claiming the lease-leaseback agreement was unconstitutional, illegal, and invalid because the District did not obtain competitive bids for the project. The trial court did not err in granting the District’s motion for summary judgment, as the District was not required to obtain competitive bids under Education Code section 17406. We affirm…