Alpine Homes, Inc. v. City of W. Jordan

• Decision Date: 10 August 2017
• Docket Number: No. 20140010,20140010
• Citation: 424 P.3d 95
• Parties: ALPINE HOMES, INC., Appellees, v. CITY OF WEST JORDAN, Appellant.
• Court: Utah Supreme Court

424 P.3d 95

ALPINE HOMES, INC.,¹ Appellees,

v.CITY OF WEST JORDAN, Appellant.

No. 20140010

Supreme Court of Utah.

Filed August 10, 2017

Bruce R. Baird, P. Matthew Muir, Salt Lake City, for appellees.

Jeffrey Robinson, Robert Thorup, Stuart E. Williams, Paul D. Dodd, West Jordan City, for appellant.

Justice Durham authored the opinion of the Court in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Judge Connors joined.

Having recused himself, Justice Pearce does not participate herein; District Court Judge David M. Connors sat.

On Appeal of Interlocutory Order

Justice Durham, opinion of the Court:

INTRODUCTION

¶ 1 In this case, several property developers allege that the City of West Jordan violated statutory provisions that regulate how a municipality may spend the impact fees collected from developers. They claim that the city violated statutes requiring it to spend the fees on specified categories of expenditures within six years. The developers' first claim for relief in the operative complaint is for a declaratory judgment. The district court dismissed only the last portion of that claim, which sought a declaratory judgment that West Jordan must refund all or part of the impact fees to them. Neither party addresses this claim on appeal, so we make no ruling as to the declaratory judgment action. Nor does either party argue against the district court's dismissal of the developers' sixth claim, the request for attorney fees as a separate claim for relief. The developers' second through fifth claims for relief seek a refund of the allegedly misspent or unspent impact fees either because of an unconstitutional taking or as a claim in equity.

¶ 2 Our threshold concern is whether the developers have standing to bring their claims. Standing is a question of subject matter jurisdiction that "raise[s] fundamental questions regarding a court's basic authority over the dispute." Brown v. Div. of Water Rights of Dep't of Nat. Res. , 2010 UT 14, ¶ 13, 228 P.3d 747. This issue can be raised sua sponte by the court. See State v. Tuttle , 780 P.2d 1203, 1207 (Utah 1989). "[T]he issue of subject matter jurisdiction is a threshold issue, which can be raised at any time and must be addressed before [turning to] the merits of other claims." Am. W. Bank Members, L.C. v. State , 2014 UT 49, ¶ 10, 342 P.3d 224 (alterations in original) (citation omitted). Only if the developers have standing do we turn to whether any of their claims survive a motion to dismiss based on the merits.

¶ 3 The developers have standing to challenge the constitutionality of the impact fees they were assessed. But the time to challenge the relationship between the government's demand for property and the anticipated social costs of a proposed land use is at the time the impact fees are exacted and is limited by statute to "one year after the day on which the person or entity pays the impact fee." UTAH CODE § 11-36a-702(1)(c). The developers' argument that their claims against West Jordan for either allegedly failing to spend impact fees within six years or spending the fees on impermissible expenditures were not ripe until the six-year period elapsed is inadequate to support a constitutional takings claim. The manner in which a city spends impact fees does not affect the constitutionality of the initial demand for fees. See Koontz v. St. Johns River Water Mgmt Dist. , 570 U.S. 595, 133 S.Ct. 2586, 186 L.Ed.2d 697 (2013). We hold that the developers have failed to state a takings claim for which relief can be granted.

¶ 4 To the extent that the developers are seeking a remedy of a refund of fees in equity for the asserted injury of illegally misspent or unspent fees, they do not have standing. The city was authorized by the Impact Fees Act to assess impact fees to offset the expected costs of development in certain areas. See UTAH CODE §§ 11-36a-101 to -705. There is no injury to the developers by the authorized assessment of impact fees that survive a takings challenge. We hold that where the developers cannot establish an unconstitutional demand for authorized impact fees at the time they were exacted, they do not have standing to bring claims against West Jordan. As a result, the courts do not have subject matter jurisdiction to hear a claim in equity about whether the fees were misspent or unspent in this case.

¶ 5 Because the developers have failed to state a takings claim for which relief can be granted, and because they do not have standing to bring a claim in equity, we reverse the district court's denial of the motion to dismiss.

BACKGROUND

¶ 6 West Jordan, like many municipalities, requires developers to pay impact fees before the city approves a development project. These impact fees are designed to defray the anticipated increase in city expenditures caused by the proposed development. The impact fees collected by West Jordan include fees associated with the increased need for park services, roads, police protection, water services, storm water infrastructure, and sewer services. The legislature has enacted the Impact Fees Act, which regulates the manner in which cities and other political subdivisions may assess and spend impact fees. UTAH CODE §§ 11-36a-101 to -705.

¶ 7 In 2012, thirteen developers that had paid impact fees to West Jordan between 2003 and 2006 filed this action. The operative complaint claimed that the developers were entitled to a refund of all or some of these fees under two broad theories. The developers claimed that West Jordan violated the Impact Fees Act by failing to spend or encumber all of the impact fees within six years, see id. § 11-36a-602(2)(a), and by spending portions of the impact fees on impermissible uses, see id. § 11-36a-602(1).² The developers argued that these violations constituted "a taking of private property for public use without just compensation in violation of Article 1 Section 22 of the Utah Constitution and the Fifth and Fourteenth Amendments to the U.S. Constitution." The developers also asserted an "equitable" right to reimbursement because West Jordan had failed to comply with two provisions of the Impact Fees Act.

¶ 8 West Jordan filed a motion to dismiss these claims. It argued that any failure to spend the impact fees in the manner prescribed by the Act was not an unconstitutional taking of the developer's private property. West Jordan also argued that the Impact Fees Act did not give the developers a private refund remedy for any failure to comply with provisions regulating its use of the impact fees, and that the developers had no equitable right to a refund.

¶ 9 The district court denied West Jordan's motion to dismiss the developers' constitutional and equitable claims. This court subsequently granted West Jordan's petition to file an interlocutory appeal from the district court's order denying dismissal of these claims. After hearing initial oral arguments on this case in October 2015, we remanded to the district court for the limited purpose of determining if any of the developers owned any of the property at issue in this action. The district court found that they had no remaining ownership interest in the properties in question. We then requested supplemental briefing on the question of the developers' standing to bring this claim, and provided each party the opportunity to present their cases at oral arguments in November 2016.

STANDARD OF REVIEW

¶ 10 Our standard of review for standing is "generally ... considered a 'mixed question' because it involves the application of a legal standard to a particularized set of facts." Utah Chapter of the Sierra Club v. Utah Air Quality Bd. , 2006 UT 74, ¶ 13, 148 P.3d 960. But "the question of whether a given individual or association has standing to request a particular relief is primarily a question of law." Kearns-Tribune Corp. v. Wilkinson , 946 P.2d 372, 373 (Utah 1997). We review the "factual determinations made by a trial court with deference." Id. at 373–74. However, we afford "minimal discretion to the trial court" on a "determination[ ] of whether a given set of facts fits the legal requirements for standing." Id. at 374.

¶ 11 We review the district court's decision to dismiss de novo. See Turner v. Staker & Parson Cos. , 2012 UT 30, ¶ 7, 284 P.3d 600 ("A ruling on a motion to dismiss presents a legal question that we review for correctness, affording no deference to the district court's decision.").

ANALYSIS

¶ 12 The standing of the developers to bring the claims raised in this case is a threshold question. We address separately the standing for the takings claims and the claims for equitable relief. As to the takings claims, we conclude that the developers do have constitutional and statutory standing to bring claims for a taking, and therefore we assess this claim on its merits. We ultimately conclude that the takings claims were not filed timely and are no longer available as a remedy. We thus reverse the ruling of the district court and direct dismissal of the takings claims.

¶ 13 Regarding the claims for relief based in equity, we conclude that there is no statutorily granted standing, so the developers must establish standing according to Utah case law. Because a refund of the impact fees the developers incurred will not redress the parties that would actually be injured by the city's alleged misspent or unspent impact fees, the developers fail to establish standing for these claims. We therefore will not address this issue on the merits. Again, we reverse the district court and direct dismissal of the claims in equity.

I. THE TAKINGS CLAIMS

¶ 14 The developers had a statutorily granted "standing to file a declaratory judgment action challenging the validity of an impact fee." UTAH CODE § 11-36a-701(1). However, this right is "[s]ubject to the time limitations described in Section 11-36a-702 and procedures set forth in Section 11-36a-703." Id. § 11-36a-701(3)(a).

Section 11-36a-702(1)(c) limits actions...