American Tierra Corp. v. City of West Jordan

• Decision Date: 05 May 1992
• Docket Number: No. 900186,900186
• Parties: AMERICAN TIERRA CORP., Covecrest Properties, Brighton Builders, Inc., Arnold Development Co., and R & D Engineers, Inc., Plaintiffs and Appellants, v. CITY OF WEST JORDAN, Defendant and Appellee.
• Court: Utah Supreme Court

Page 757

840 P.2d 757

AMERICAN TIERRA CORP., Covecrest Properties, Brighton Builders, Inc., Arnold Development Co., and R & D Engineers, Inc., Plaintiffs and Appellants, v. CITY OF WEST JORDAN, Defendant and Appellee.

No. 900186.

Supreme Court of Utah.

May 5, 1992.

Rehearing Denied June 2, 1992.

Robert J. DeBry, Murray, for American Tierra Corp., Arnold Development Corp., Brighton Builders, R & D Engineers.

Wallace R. Bennett, Salt Lake City, for American Tierra Corp.

Melvin S. Martin, Salt Lake City, for Covecrest Properties.

Stephen G. Homer, West Jordan, for City of West Jordan.

DURHAM, Justice:

Plaintiffs American Tierra Corporation, Arnold Development Co., Brighton Builders, Inc., R & D Engineers, Inc., and Covecrest Properties (collectively "the subdividers") appeal from the trial court's grant of partial summary judgment in favor of defendant City of West Jordan.

This action is part of a second generation of litigation arising from a series of cases decided in Call v. City of West Jordan, 606 P.2d 217 (Utah 1979) (Call I ), on rehearing, 614 P.2d 1257 (Utah 1980) (Call II ), following remand, 727 P.2d 180 (Utah 1986) (Call III ), following remand, 788 P.2d 1049 (Utah Ct.App.1990) (Call IV ), cert. denied, 800 P.2d 1105 (Utah 1990). The cases arise out of a 1975 amendment to West Jordan's ordinance No. 33. The amendment required subdividers to dedicate seven percent of their land to West Jordan or, at the option of the city, pay the equivalent value as an impact fee to be used for flood control and/or parks and recreation facilities. West Jordan, Utah, Ordinance 33, § 9-C-8(a) (1975). ¹

In November 1977, an attorney from the offices of Robert J. DeBry sent a letter to the West Jordan mayor and city council on behalf of two subdividers, John Call and Clark Jenkins, and "all others similarly situated who have been required to dedicate land or pay cash to the City of West Jordan" under ordinance No. 33. The letter demanded that "all such land and/or cash be returned" because the ordinance is invalid. Failing such a return, the letter stated, "Mr. Call and Mr. Jenkins have authorized [DeBry's] office to file a class action lawsuit for the return of such land and/or cash." West Jordan received the letter but declined to return the cash and property.

On February 7, 1978, DeBry's office filed a class action complaint in district court against West Jordan for the return of the impact fees. The complaint asserted that ordinance No. 33 was invalid and designated the class as "all persons, partnerships, businesses, and corporations which have, or will be required, to either dedicate seven percent (7%) of the land area of their proposed subdivision, or the equivalent value in cash to [West Jordan] in accordance with Ordinance No. 33." In April 1978, the district court denied class certification. In 1986, after a series of proceedings including appeals to and remands from this court, we declared ordinance No. 33 invalid and void ab initio and upheld the trial court's denial of class action status. Call III, 727 P.2d at 183-84. Subsequently, on November 5, 1987, the trial court awarded Call and Jenkins judgment for a refund of their impact fees plus interest. That judgment was not disturbed by the Utah Court of Appeals in Call IV, 788 P.2d at 1050-51.

Between 1975 and 1978, the individual plaintiffs in the present action paid the fees for which they now seek a refund. On November 24, 1987, American Tierra Corporation, Arnold Development Company, Covecrest Properties, and Brighton Builders, Inc., each filed a complaint in district court alleging that because ordinance No. 33 is void, they are entitled to a refund of impact fees paid to West Jordan. On July 19, 1988, R & D Engineers, Inc., filed a similar complaint. The trial court consolidated the cases.

West Jordan moved for summary judgment, claiming that the subdividers' complaints are barred by various statutes of limitation and "similar procedural defects." The subdividers filed a cross-motion for summary judgment on the statute of limitation issue. They also filed a separate motion for summary judgment on other issues, contending that West Jordan's affirmative defenses of mistake, estoppel, waiver, laches, and unjust enrichment are, as a matter of law, without merit. The trial court granted West Jordan's motion for summary judgment, concluding that the subdividers (1) failed to file a notice of claim pursuant to the Utah Governmental Immunity Act within ninety days after their causes of action arose, and (2) failed to file their litigation within a one-year statute of limitation period after their cause of action arose. The trial judge also denied the subdividers' cross-motion for summary judgment and their motion for summary judgment on the affirmative defenses. The subdividers have now appealed.

In this appeal, we address two questions of law: (1) whether the Utah Governmental Immunity Act applies to the facts of this case, and (2) what statute of limitation applies and whether it expired before the subdividers filed their complaints. We accord no deference to the legal conclusions the trial court gave to support its grant of summary judgment. City of Monticello v. Christensen, 788 P.2d 513, 516 (Utah), cert. denied, 498 U.S. 841, 111 S.Ct. 120, 112 L.Ed.2d 89 (1990).

APPLICABILITY OF THE UTAH GOVERNMENTAL IMMUNITY ACT

Initially, West Jordan argues that the subdividers' action is barred by their failure to comply with the provisions of the Utah Governmental Immunity Act. ² The Act sets time limits within which a notice of claim and an action itself may be filed against a governmental entity. Utah Code Ann. §§ 63-30-13 to -15 (1989). ³ West Jordan asserts that the subdividers never filed their own notice of claim with the city. In response, the subdividers assert that they did not need to file such a notice because their claim for a refund of fees paid to West Jordan is equitable and therefore exempt from the notice requirements of the Utah Governmental Immunity Act.

This court long has recognized a common law exception to governmental immunity for equitable claims. El Rancho Enterprises, Inc. v. Murray City Corp., 565 P.2d 778, 779 (Utah 1977) (citing Auerbach v. Salt Lake County, 23 Utah 103, 63 P. 907 (1901)). Neither the passage of time nor the enactment of the Utah Governmental Immunity Act has eroded this exception. El Rancho, 565 P.2d at 780; Jenkins v. Swan, 675 P.2d 1145, 1154 (Utah 1983). Therefore, in this case we face the question whether the claim sounds in law or equity.

If the fee imposed under ordinance No. 33 were a tax, the equitable nature of this claim would be clear. Taxpayers' actions generally are governed by equitable principles. 74 Am.Jur.2d Taxpayers Actions § 2, at 185 (1974). Taxpayers who are compelled to pay an illegal levy are specially damaged by the increase of the burden they are forced to bear, giving them an interest distinct from that of the general public. That interest entitles them to equitable relief. Id. § 14, at 205-06.

This court has previously held that for the purpose of determining the validity of ordinance No. 33, the fee imposed under the ordinance is not strictly speaking a "tax." See Call I, 606 P.2d at 220-21. Nevertheless, for the purpose of determining whether the remedy sought is equitable in nature and whether the Utah Governmental Immunity Act applies, we conclude that the fee is analogous to a tax. Special assessments are very like taxes in terms of the burdens imposed on those assessed, and it makes sense to treat actions for their recovery as we would treat a taxpayer action.

Furthermore, this court already has recognized that an action to recover unlawful charges for city services is equitable in nature. See El Rancho, 565 P.2d at 779-80. The instant case similarly involves an action by private parties against a governmental entity to recover public revenues involuntarily paid and unlawfully collected. Accordingly, we hold that the subdividers' claims for fees paid under ordinance No. 33 are equitable and therefore exempt from the filing requirements and time limits imposed by the Utah Governmental Immunity Act. As a matter of law, the trial court incorrectly concluded that West Jordan was entitled to summary judgment because the subdividers did not comply with the time limits prescribed in Utah Code Ann. §§ 63-30-13 to -15 (1989).

STATUTES OF LIMITATION

Having concluded that the subdividers' claims are equitable and not barred for failure to comply with the Utah Governmental Immunity Act, we must determine whether they are nonetheless barred by a statute of limitation. Historically, courts of equity were not bound by statutes of limitation. See, e.g., Patterson v. Hewitt, 195 U.S. 309, 317, 25 S.Ct. 35, 36, 49 L.Ed. 214 (1904). Today, however, many jurisdictions have commingled legal and equitable remedies in one form of action. In these jurisdictions, "the applicability of statutes of limitation to equitable proceedings appears to be unquestioned." 27 Am.Jur.2d Equity § 157, at 693 (1966). Utah is one of those jurisdictions that long ago commingled legal and equitable actions. See Borland v. Chandler, 733 P.2d 144, 146 (Utah 1987) (citing Utah R.Civ.P. 2). Moreover, years before Utah merged its legal and equitable systems, Utah applied statutes of limitation to equitable actions. See, e.g., Fullerton v. Bailey, 17 Utah 85, 53 P. 1020 (1898). We therefore must determine which statute of limitation applies to this action.

Frequently, actions in equity are held to come within the scope of the statutory provision that establishes a time limit applicable to all causes of action for which a specific limit is not otherwise provided. 27 Am.Jur.2d Equity § 157, at 693 (1966). Utah's catch-all provision places a four-year limitation period on actions "not otherwise provided for by law." Utah Code Ann. § 78-12-25(3).

This court previously has applied the predecessor of section...