Case 2:10-cv-00713-LOA Document 1 Filed 03/30/10 Page 1 of 8

1 MARICOPA COUNTY
OFFICE OF GENERAL LITIGATION SERVICES
2
By: RANDALL R. GARCZYNSKI
3 State Bar No. 023223
garczynskir@mail.maricopa.gov
4 BRAD K. KEOGH
State Bar No. 010321
5 keoghb@mail.maricopa.gov
KAREN HARTMAN-TELLEZ
6 State Bar No. 021121
hartmank@mail.maricopa.gov
7
Maricopa County Administration Building
8 301 West Jefferson Street, Suite 3200
Phoenix, Arizona 85003-2143
9 Telephone (602) 372-5700

10 Attorneys for Plaintiff Maricopa County

11 IN THE UNITED STATES DISTRICT COURT

12 DISTRICT OF ARIZONA

13 Maricopa County, a political sub- NO. CV 2010-713

division of the State of Arizona
14 COMPLAINT FOR DECLARATORY
Plaintiff, JUDGMENT
15
v.
16
Motor Coach Industries, Inc.,
17
Defendant.
18

19
NOW COMES THE PLAINTIFF, Maricopa County, by its undersigned
20 counsel, for its Complaint for Declaratory Judgment against the Defendant Motor
Coach Industries, Inc. and does state as follows:
21
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1 PARTIES, JURISDICTION AND VENUE

2 1. Plaintiff Maricopa County (the “County”) is a political sub-division of
the State of Arizona.
3
2. Defendant Motor Coach Industries, Inc. (“MCI”) is a corporation with
4
its principal place of business at 1700 E. Golf Road, Suite 300, Schaumburg,
5 Illinois, engaged in the manufacture and sale of motor coach vehicles for various

6 uses including, but not limited to, prisoner/inmate transportation vehicles.

3. The purchase order/contract that is the subject of this action,
7
Maricopa County Sheriff’s Office, Jail Enhancement Fund Purchase Order, No.
8 JEF4232, was issued in Phoenix, Maricopa County, Arizona.
9 4. The commodity/vehicle – a 2009 MCI D4000 I/M Security Transport
Vehicle – was delivered across state lines to and is currently located in Phoenix,
10
Maricopa County, Arizona.
11 5. This Court has original jurisdiction over this action pursuant to 28
12 U.S.C. §§ 1332 and 2201, and venue is proper in this District pursuant to 28
U.S.C § 1391.
13
GENERAL ALLEGATIONS
14
6. On or about October 8, 2008, MCI entered into a purported contract
15 with Maricopa County Sheriff’s Office (“MCSO”) via purchase order No.

16 JEF4232, for the sale and purchase of a 2009 MCI D4000 I/M Security
Transport Vehicle, VIN # 58991 (the “Bus”). The purchase order reflected a total
17
purchase price of $456,221.57. (See Purchase Order No. JEF4232, attached
18 and incorporated herein by reference as Exhibit A).
19 7. MCSO is a non-jural entity. It can neither sue or be sued and has no
authority or ability to enter into legal contracts.
20
8. On or about October 23, 2008, public monies designated as Jail
21 Enhancement Funds (“JEF”), were dispersed by MCSO from a separate
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 Case 2:10-cv-00713-LOA Document 1 Filed 03/30/10 Page 3 of 8

1 account, not held by the County Treasurer, to MCI to pay purchase order No.
2 JEF4232.
9. MCI delivered the Bus to MCSO on May 8, 2009. (See Coach Delivery
3
Record, attached hereto and incorporated herein by reference as Exhibit B).
4
10. Subsequent to delivery of the Bus by MCI, MCSO requested that
5 the County title, license and insure the Bus.

6 11. The County has refused to accept ownership of the bus or to title,
license or insure the Bus.
7
12. After MCSO requested that the County title, license and insure the
8 Bus, the County’s Internal Audit Department conducted an investigation into the
9 transaction including, but not limited to, the issuance of the purchase order to
MCI, the payment of funds to MCI and the delivery of the Bus by MCI.
10
13. The County’s internal audit concluded that the MCI’s sale and
11 MCSO’s purchase of the Bus violated State law, County procurement policies
12 and JEF guidelines.
14. A.R.S. § 11-254.01 provides that County purchases of large
13
amounts, such as the Bus purchase, shall be subject to open, public,
14
competitive bids, which shall be made in a sealed bid process.
15 15. The stated public policy of A.R.S. § 11-254.01 requiring, open,

16 public competitive bids is to prevent favoritism, fraud, and public waste.

16. In violation of A.R.S. § 11-254.01, there was no open public
17
competitive bidding on the MCI purchase order.
18 17. Pursuant to A.R.S. § 11-492 all monies received by county officials
19 shall be placed with the county treasurer. There is no exception to A.R.S. § 11-
492 for any JEF monies dispersed to a county sheriff pursuant to A.R.S. § 41-
20
2401 et seq.
21 18. JEF Guidelines (no. 6) provide that county sheriffs expending JEF
22 money shall comply with their respective county procurement procedures. (See
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 Case 2:10-cv-00713-LOA Document 1 Filed 03/30/10 Page 4 of 8

1 JEF Guidelines (revised 2001), attached and incorporated herein by reference

2 as Exhibit C).
19. Consistent with state law, JEF Guidelines require recipients of any
3
JEF monies to deposit same with their respective county treasurer.
4
20. JEF Guidelines direct county sheriffs to record financial activity on
5 their respective county’s accounting and reporting system.

6 21. MCSO did not record the payment made to MCI on October 23,
2008, in the County’s accounting and reporting system until June 10, 2009, after
7
delivery of the Bus.
8 22. A.R.S. § 41-2501(C) authorizes counties and other political
9 subdivisions to adopt their own procurement codes. Pursuant to that statute, the
County established a procurement code (the “Code”) to regulate purchases of
10
goods and services. The Code applies to every expenditure of public monies.
11 23. County Code § MC1-309(A) provides that after determining a need
12 a County agency must submit a purchase request to the County Procurement
Officer.
13
24. MCSO did not submit a request to the County Procurement Officer
14
for the purchase order issued to MCI.
15 25. County Code §§ MC1-105(A) and MC1-201 provide that all

16 contracts over $250,000.00 must be approved by the County Board of

Supervisors (“Board”).
17
26. MCI’s proposed sale of the Bus, which was in excess of
18 $250,000.00, was never presented to or approved by the Board.
19 27. County Code § MC1-343(A) provides that the Board may award a
contract exceeding $50,000.00 without competitive bidding only when
20
documentation is provided which states that only one source is available for the
21 purchase.
22
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1 28. County Code § MC1-344(A) provides that any agency making a

2 request to restrict procurement to one contractor must submit written justification
to the Board explaining why no other contractor is suitable or acceptable.
3
29. Even though the MCI purchase order exceeded $50,000.00, MCSO
4
provided no justification, written or otherwise, explaining to the Board that MCI
5 was the only available source for the Bus or why no other contractor was

6 suitable or acceptable.
30. In fact, the County has numerous other inmate/court transportation
7
vehicles in its fleet that were purchased from other vendors/sources.
8 31. Pursuant to County Code § MC1-105(B), payment for any
9 commodity, such as the Bus, shall not be made unless pursuant to a written
contract procured under the Code.
10
32. There was no written contract procured pursuant to the Code for the
11 Bus.
12 33. In addition to the Code, other County policies and procedures apply
to the purchase of vehicles.
13
34. Pursuant to County policy, the Equipment Services Department of
14
Maricopa County is the only agency authorized to procure vehicles for the
15 County.

16 35. All fleet vehicles, including such vehicles as the Bus, are owned by
County and titled in the name of County.
17
36. All other inmate/court transportation buses used by MCSO are
18 owned by the County and titled in the name of the County.
19 37. Pursuant to County Policy A2306 elected officials who request to
acquire a vehicle must submit their request on an Agenda Form for Board
20
approval.
21 38. No request was submitted on an Agenda Form for Board approval
22 of the acquisition of the Bus pursuant to the MCI purchase order.
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1 39. Department of Finance (“DOF”) Capital Asset Manual 1E § 4

2 provides that upon Board approval the department may order a vehicle.
40. There was no Board approval of the MCI purchase order before
3
MCSO issued it.
4
41. Pursuant to Agenda Item No. C-49-09-004-6-00, the County
5 approved a Fiscal Year 2009 Capital Purchasing Freeze on July 23, 2008, for all

6 capital equipment and for all funds. The County established a system whereby
an elected official could work with the Office of Management and Budget
7
(“OMB”) to determine whether a purchase was appropriate as an exception to
8 the Capital Purchasing Freeze.
9 42. The purchase order to MCI was issued on October 8, 2008, after
the purchasing freeze was in full force and effect, but OMB received no request
10
for exemption, nor was any exemption to the Capital Purchasing Freeze
11 granted.
12 CLAIM FOR DECLARATORY RELIEF
43. The allegations set forth in paragraphs 1-47 above are incorporated
13
here as if fully stated.
14
44. The purchase order issued to MCI was purported to be from MCSO
15 which is a non-jural entity, without legal authority or ability to enter into a

16 contract.
45. MCSO policy and procedure GE-1, effective date 03-04-09 states;
17
5. County Contracts: Only the BOS enters into contracts and
18 purchases real and personal property, in accordance with ARS.
This authority has been partially delegated, by a BOS resolution, to
19 the Director of Materials Management. … Orders for materials,
supplies, equipment, or services on a contractual basis will be
20 processed by Materials Management and awarded by the BOS.
21 46. MCI’s delivery of the Bus was to MCSO, a non-jural entity with no
authority to contract.
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1 47. The procedure used by MCI and MCSO to order, sell, pay for, and
2 deliver the Bus violated state statutes, numerous County Procurement Code
provisions and policies, MCSO policy GE-1, and various JEF Guidelines.
3
48. A public contract in violation of state statutes, the County
4
Procurement Code, and JEF Guidelines is void ab initio as a matter of law.
5 49. The County is prohibited by law from approving, adopting, or

6 ratifying a void public contract that is in violation of statutes, County

Procurement Code and JEF Guidelines.
7
WHEREFORE, Plaintiff Maricopa County requests the Court enter a
8 Declaratory Judgment and relief as follows:
9 1. Declaring MCI’s purported contract and the subject purchase order
void ab initio;
10
2. Ordering MCI to immediately return to Maricopa County the entire
11 sum it illegally received pursuant to said void contract and purchase order, in the
12 amount of $456,221.57, plus interest due under law, said amount to be
deposited with the County Treasurer pursuant to A.R.S. § 11-492 and thereafter
13
administered and used pursuant to JEF Guidelines and the Maricopa County
14
Procurement Code;
15 3. Ordering Defendant MCI to immediately remove its bus from County

16 premises and to bear all expenses associated therewith;

4. For attorneys’ fees and costs as allowable by law; and
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1 5. For such other relief that would be just and equitable under the
2 circumstances.
RESPECTFULLY SUBMITTED this day of March 2010.
3

4 MARICOPA COUNTY
OFFICE OF GENERAL LITIGATION SERVICES
5

6 BY: /s/Randall R. Garczynski

RANDALL R. GARCZYNSKI
7 BRAD K. KEOGH
KAREN J. HARTMAN-TELLEZ
8 Attorneys for Plaintiff

9
/s/Jennifer Christiansen
10 S:\Cases\2010\NT\MC v. MotorCoach, Inc.-NT10-0040\Pleadings\Complaint 03.05.10.docx

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