Lippold v. Meade Cnty. Bd. of Comm'rs

• Decision Date: 24 January 2018
• Docket Number: 27976,27993
• Parties: Gary LIPPOLD and Jane Murphy, and The City of Sturgis, a South Dakota Municipal Corporation, Appellees, v. MEADE COUNTY BOARD OF COMMISSIONERS, Alan Aker, Robert Bertolotto, Robert Heidgerken, Galen Neiderwerder, and Linda Rausch, Appellants, and Buffalo Chip Campground, LLC, Intervenor and Appellant.
• Court: South Dakota Supreme Court

906 N.W.2d 917

Gary LIPPOLD and Jane Murphy, and The City of Sturgis, a South Dakota Municipal Corporation, Appellees,

v.MEADE COUNTY BOARD OF COMMISSIONERS, Alan Aker, Robert Bertolotto, Robert Heidgerken, Galen Neiderwerder, and Linda Rausch, Appellants,andBuffalo Chip Campground, LLC, Intervenor and Appellant.

27976

27993

Supreme Court of South Dakota.

ARGUED ON APRIL 25, 2017

OPINION FILED January 24, 2018

As Modified on Denial of Rehearing March 13, 2018

MARK F. MARSHALL of Bangs, McCullen, Butler, Foye & Simmons, LLP Rapid City, South Dakota, Attorneys for appellees Gary Lippold and Jane Murphy.

GREGORY J. BARNIER, Sturgis City Attorney Sturgis, South Dakota, Attorney for appellee City of Sturgis.

JACK H. HIEBZACHARY W. PETERSON of Richardson, Wyly, Wise, Sauck & Hieb, LLP Aberdeen, South Dakota, Attorneys for appellants Meade County Board of Commissioners, Alan Aker, Robert Bertolotto, Robert Heidgerken, Galen Neiderwerder, & Linda Rausch.

KENT R. HAGGJOHN STANTON DORSEY of Whiting, Hagg, Hagg, Dorsey & Hagg, LLP Rapid City, South Dakota, Attorneys for appellant Buffalo Chip Campground, LLC.

THOMAS H. FRIEBURG, Frieburg, Nelson & Ask, LLP Beresford, South Dakota, Attorneys for amicus South Dakota Municipal League.

KERN, Justice

[¶ 1.] The City of Sturgis, Gary Lippold, and Jane Murphy appealed the order of the Meade County Board of County Commissioners approving incorporation of the proposed municipality of Buffalo Chip City, South Dakota, and setting an election for voters to decide whether to assent to incorporation. The circuit court denied a request to stay the election. After the election, the court heard the appeal pursuant to SDCL 7-8-27 and issued a judgment declaring that the Board's order was invalid, that the election was a nullity, and that consequently, Buffalo Chip City was void. The Board and Buffalo Chip Campground, LLC (Campground), an intervenor, appeal the circuit court's judgment. We reverse the circuit court and vacate its judgment.

Facts and Procedural History

[¶ 2.] This case began with an attempt by area residents affiliated with the Campground to incorporate a new city in western South Dakota near the city of Sturgis, home of the famous Sturgis Motorcycle Rally.¹ This event draws hundreds of thousands of motorcycle enthusiasts to Sturgis each year and usually occurs during the first full week of August. On February 11, 2015, twenty-six Meade County residents submitted a petition for the municipal incorporation of Buffalo Chip City to the Board. They withdrew the petition, however, when they discovered the boundary for the proposed city was impermissibly close to Sturgis. SDCL 9-3-1.1 requires the boundary for a proposed city to be no closer than three miles from the perimeter of any existing city.

[¶ 3.] On February 20, 2015, seventeen Meade County residents submitted a new petition for the municipal incorporation of Buffalo Chip City to the Board. The new proposed boundary for Buffalo Chip City was more than three miles away from Sturgis. The petitioners also filed a survey and map of the proposed city, which were verified by an affidavit of the surveyor. Additionally, petitioners filed a census for organization of the new city listing landowners and voters within the proposed territory. The February 20 petition, however, contained a discrepancy between the written legal description of the proposed boundary and the official map depicting the proposed boundary.

[¶ 4.] A few hours after the February 20 petition was filed, the Sturgis City Council passed a resolution to annex the Sturgis Municipal Airport, invoking an emergency provision under SDCL 9-19-13 that allowed the resolution to take effect immediately. The council based its use of the emergency provision on the need to preserve the health and welfare of its citizens. On February 23, 2015, Sturgis filed the airport annexation resolution with the Board. However, the Board considered the annexation invalid, concluding that use of the emergency provision was improper and that the filing lacked an accurate map of the annexed territory. Further, the Board determined that the petitions to incorporate Buffalo Chip City had priority because they were filed first. No party, however, has challenged the validity of the annexation in a court of law.

[¶ 5.] On February 26, 2015, seventeen Meade County residents filed two documents with the Board: an amended version of the February 20 petition and a "new" petition for incorporation of Buffalo Chip City. The petitioners corrected the discrepancy between the description and the map in both petitions. On February 27, 2015, the Board held a public hearing and spent several hours listening to testimony and discussing the petitions. Concluding the petitioners had satisfied the requirements of SDCL chapter 9-3, the Board voted 3-2 to grant the amended petition. Specifically, the Board found that the proposed area of incorporation had more than thirty² voters as required by SDCL 9-3-1 and that more than a quarter of the voters signed the amended petition in satisfaction of SDCL 9-3-5. Pursuant to SDCL 9-3-6, the Board ordered the incorporation of Buffalo Chip City and scheduled an election on May 7, 2015, for voters to decide whether to assent to incorporation. Petitioners withdrew the "new" petition in light of the fact that the Board granted the amended petition.

[¶ 6.] On March 27, 2015, Lippold, Murphy, and several other Meade County residents asked the Meade County State's Attorney to appeal the Board's decision ordering the incorporation of Buffalo Chip City and setting an election on the matter. The Meade County State's Attorney declined to appeal.

[¶ 7.] On March 31, 2015, Lippold and Murphy appealed the Board's order to the circuit court as persons aggrieved by the Board's decision under SDCL 7-8-27. Sturgis also appealed the decision. On April 20, 2015, the Campground moved to intervene.³ Shortly thereafter, the circuit court consolidated the cases.

[¶ 8.] On April 29, 2015, Sturgis filed a motion to stay the election and requested a hearing before the circuit court. On May 1, 2015, the circuit court held a teleconference with Sturgis's attorney and counsel for the Board. The circuit court denied the motion for a stay, believing it could afford complete relief to Sturgis even after the election and formal incorporation of Buffalo Chip City if the Board's decision were later reversed. Sturgis did not cite SDCL 9-3-20 in its motion to stay the election. SDCL 9-3-20 provides that "[t]he regularity of the organization of any acting municipality shall be inquired into only in an action or proceeding instituted by or on behalf of the state."

[¶ 9.] On May 7, 2015, the election occurred as scheduled, and a majority of the voters chose to incorporate Buffalo Chip City. On May 13, the Board declared Buffalo Chip City formally incorporated pursuant to SDCL 9-3-12. On May 20, the Board filed Buffalo Chip City's Articles of Municipal Incorporation with the South Dakota Secretary of State.

[¶ 10.] On January 11, 2016, the South Dakota Municipal League moved to intervene in the suit. On March 4, 2016, the circuit court denied the motion but permitted the Municipal League to file an amicus brief.⁴

[¶ 11.] The Campground moved to dismiss the appeal for a lack of subject-matter jurisdiction, arguing that the Board's order was not an appealable decision and that Sturgis, Lippold, and Murphy lacked standing because they were not persons aggrieved per SDCL 7-8-27. Additionally, the Campground argued they lacked standing because SDCL 9-3-20 provides that only the State of South Dakota or those acting on its behalf may challenge the regularity of the organization of a municipality once it is incorporated. On March 28, 2016, the circuit court denied the motion.

[¶ 12.] Sturgis, Lippold, and Murphy next sought summary judgment on the grounds that the petitioners failed to comply with the requirements of SDCL chapter 9-3. They alleged that none of the residents who signed the petition and none of the voters on the filed census who claimed to be residents actually lived within the boundaries of the proposed city. In response, the Board moved for partial summary judgment, arguing it had no duty to investigate the residency of the individual voters who signed the petitions. The circuit court denied both motions.

[¶ 13.] On April 6, 2016, James Walczak, Buffalo Chip City's finance officer, filed an affidavit on behalf of Buffalo Chip City seeking a writ of prohibition from this Court. Buffalo Chip City petitioned this Court to prevent the circuit court "from continuing to assert jurisdiction over the subject matter of the action," contending that SDCL 9-3-20 permits only the State or parties on the State's behalf to challenge the regularity of the organization of an acting municipality. On April 12, 2016, this Court issued an order denying the application for writ of prohibition.

[¶ 14.] On May 11, 2016, the circuit court held a one-day bench trial. Lippold and Walczak testified in addition to Kirk Chaffee, the Meade County Director of Planning, and Fay Bueno, a finance officer for Sturgis. On May 20, the court issued a written opinion, and on August 24, the court issued detailed findings of fact, conclusions of law, and a judgment reversing the Board's February 27, 2015 order incorporating Buffalo Chip City and scheduling an election.

[¶ 15.] In reversing the Board's decision, the court found serious deficiencies in the filings as well as errors in the Board's procedural process. The court found the "lots" listed as residences on the incorporation documents were mere patches of dirt, which were unoccupied except during the Sturgis Motorcycle Rally. Further, the court found the amended petition and census for incorporating the proposed Buffalo Chip City was "rife with false information." The court concluded: (1) that the amended petition was not properly filed with the Meade County Auditor; (2) that the area to be incorporated "conta...