Bigs v. City of Wichita, 83,168.

• Decision Date: 01 June 2001
• Docket Number: No. 83,168.,83,168.
• Citation: 23 P.3d 855,271 Kan. 455
• Parties: BIGS, et al., Appellees, v. CITY OF WICHITA, KANSAS, Appellant.
• Court: Kansas Supreme Court

271 Kan. 455

23 P.3d 855

BIGS, et al., Appellees, v. CITY OF WICHITA, KANSAS, Appellant.

No. 83,168.

Supreme Court of Kansas.

Opinion filed June 1, 2001.

Sharon L. Dickgrafe, assistant city attorney, argued the cause, and Gary E. Rebenstorf, city attorney, was with her on the briefs for appellant.

David R. McClure, of Fettis & McClure, of Wichita, argued the cause, and Everett C. Fettis, of the same firm, was with him on the brief for appellees.

Rebecca S. Rice, of Topeka, was on the brief for amicus curiae Kansas Retail Liquor Dealers Association.

Ezra J. Ginzburg, assistant attorney general, was on the brief for amicus curiae Kansas Department of Revenue, Division of Alcoholic Beverage Control.

W. Robert Alderson, of Alderson, Alderson, Weiler, Conklin, Burghart & Crow, L.L.C., of Topeka, was on the brief for amicus curiae Kansas Beer Wholesalers Association.

Robert E. Duncan, II, general counsel, of Topeka, was on the brief for amicus curiae Kansas Wine and Spirits Wholesalers Association.

Sandra Jacquot and Larry Kleeman, of Topeka, were on the brief for amicus curiae League of Kansas Municipalities.

The opinion of the court was delivered by

ALLEGRUCCI, J.:

Plaintiffs (Licensees) are private clubs and drinking establishments that brought this action against the City of Wichita (City) seeking refunds of excess liquor license fees collected by the City between July 1, 1988, and November 28, 1995. The district court certified a class, denied the City's motions for summary judgment, and granted Licensees' cross-motion for summary judgment. The City appealed. The case was transferred from the Court of Appeals pursuant to K.S.A. 20-3018(c).

In ruling on the summary judgment motions, the trial court made the following findings of facts:

"1. Plaintiffs and the class members are private clubs and/or drinking establishments located within the City limits of Wichita, Kansas, and licensed by Defendant to conduct business within the corporate City limits.

"2. Defendant is a municipal corporation.

"3. Plaintiffs and the class members bring this action in restitution to recover excess liquor license fees charged and collected by Defendant from them between July 1, 1988 and November 28, 1995.

"4. The Plaintiffs and the class members at all times material herein, were required to obtain a city liquor license and pay a license fee established by Defendant in order to do business.

"5. On August 28, 1984, Defendant adopted Charter Ordinance 96 pursuant to its Home Rule Authority. The charter ordinance exempted the City of Wichita from the provisions of K.S.A. 41-2622.

"6. On July 7, 1987, Defendant adopted Charter Ordinance No. 105 pursuant to its Home Rule Authority. The Charter Ordinance exempted the City of Wichita from the provisions of K.S.A. 41-2622 and repealed Charter Ordinance 96.

"7. Pursuant to Charter Ordinance No. 105, on December 22, 1987, Defendant adopted a Resolution which established licensing fees for clubs and drinking establishments in excess of those set forth in K.S.A. 41-2622.

"8. Prior to passage of the Resolution on December 22, 1987, Defendant held public hearings in which it represented to licensees that an increase in license fees was necessary to help offset its cost of regulation and enforcement of liquor licenses.

"9. On July 1, 1988, K.S.A. 41-2622 was amended by the state legislature. By operation of law, the amendment rescinded Charter Ordinance No. 105 and the enacting Resolution of December 22, 1987 in so far as they conflicted with it.

"10. From July 1, 1988 until November 28, 1995, Plaintiffs and the class members annually received licenses from the City of Wichita and paid licensing fees in excess of those set forth in K.S.A. 41-2622.

"11. On July 12, 1995, the Sedgwick County District Court in City of Wichita, Kansas v. Ariel Martinez Gonzalas, 95 MC 54 (1995), ruled that the City Resolution of December 22, 1987 which created a fee schedule in excess of $250.00 was null and void in so far as it authorized the assessment and collection of liquor licenses in excess of $250.00.

"12. Following the Sedgwick County District Court decision in City of Wichita, Kansas v. Ariel Martinez Gonzalas, supra, the City appealed the decision to the Kansas Supreme Court which dismissed the appeal because the issue presented was not of state-wide interest.

"13. Thereafter, on November 28, 1995, the City Council passed Resolution R-95-549 which set the schedule for city license fees at $250.00. The Agenda Report and the Minutes of the City Council Meeting state that after the adoption of Charter Ordinance No. 105 and the enacting Resolution on December 22, 1987, state law was changed as to cities such as Wichita which were charging more than the statutory amount set forth in K.S.A. 41-2622 for local license fees. Resolution R-95-549 was adopted in response to Judge David Kennedy's ruling in City of Wichita, Kansas v. Ariel Martinez Gonzalas, 95 MC 54.

"14. Between July 1, 1988 and November 28, 1995, Defendant stated on the License Application forms prepared by Defendant the amount of the license fee required to be paid in order to obtain a city liquor license.

"15. Neither the Defendant nor any Plaintiff or class member knew prior to November 28, 1995, that the 1988 amendment to the state law had rescinded by operation of law the Charter Ordinance No. 105 and the enacting Resolution.

"16. Defendant's continuing acts of charging and collecting license fees in amounts in excess of the maximum amount set forth in K.S.A. 41-2622(b) between July 1, 1988 and November 28, 1995, was based upon Defendant's mistaken belief that Charter Ordinance No. 105 and the enacting Resolution had not been rescinded by the 1988 amendment to state law.

"17. Plaintiffs and members of the class continued to pay the license fee amounts required by Defendant between July 1, 1988 and November 28, 1995, under the mistaken belief that Charter Ordinance No. 105 and the enacting Resolution remained in effect and thus, they were performing a duty to the Defendant.

"18. In addition to passing Resolution R-95-549, the City refunded a portion of fees collected in excess of $250.00 to some private clubs and drinking establishments."

The City raises six issues on appeal:

1. Was the City's licensing ordinance a valid exercise of its home rule authority?

2. Were Licensees' claims barred by the volunteer rule?

3. Were Licensees' claims barred by the statute of limitations?

4. Was the class certification appropriate?

5. Were Licensees entitled to prejudgment interest?

6. Should the attorney fees be based upon the amount of the judgment rather than the amount refunded to class members?

The City first argues that the adoption of Charter Ordinance No. 105, and the subsequent resolution establishing licensing fees in excess of those contained in K.S.A. 41-2622, was a valid exercise of the City's home rule authority.

On appeal, the City states that no factual issues exist with regard to the question of home rule authority so that the issue was appropriate for summary judgment. It should be noted that the City does dispute the second sentence of the trial court's finding of fact No. 9-"By operation of law, the amendment rescinded Charter Ordinance No. 105 and the enacting Resolution of December 22, 1987 insofar as they conflicted with it." This "finding," however, actually is a conclusion of law. The City contends that the district court entered summary judgment for the wrong party as a matter of law.

The undisputed facts relevant to the question of the City's home rule authority may be briefly stated: Licensees were required to obtain a liquor license from the City and pay a license fee in order to do business. By Charter Ordinance No. 105 and accompanying resolution, which became effective in December 1987, the City exempted itself from the fee limitations in K.S.A. 41-2622, a section of the Club and Drinking Establishment Act, K.S.A. 41-2601 et seq., (Act) and set fees exceeding the statutory maximums. On July 1, 1988, amendments to K.S.A. 41-2622 went into effect. The trial court was of the opinion and the parties agree that the post-amendment statute is uniformly applicable.

In July 1995, a Sedgwick County District Court held that the City's charter ordinance fee schedule was null and void. On November 28, 1995, the City, in response to the district court's holding, passed Resolution R-95-549, which set its liquor license fees at $250, in accordance with the statutory limit.

From July 1, 1988, until November 28, 1995, Licensees paid annual liquor license fees that exceeded the $250 maximum set forth in K.S.A. 41-2622(b).

The district court reached the following conclusions of law on the question of the City's authority to charge liquor license fees in excess of those set forth in K.S.A. 41-2622:

"1. The 1988 amendment to K.S.A. 41-2622 rendered the Club and Drinking Establishment Act uniform as to all counties and cities within Kansas.

"2. K.S.A. 41-2622(c) as it presently reads is uniformly applicable to all municipalities and counties and since the Club and Drinking Establishment Act is uniform, a city may not enact a conflicting charter ordinance.

"3. A city ordinance cannot stand if it is in `actual conflict' with a state statute that is uniformly applicable to all cities or counties.

"4. Following the 1988 amendment to K.S.A. 41-2622 of the Club and Drinking Establishment Act, Charter Ordinance No. 105 and the enacting Resolution adopted on December 22, 1987, came in `actual conflict' with the $250.00 limitation set forth in K.S.A. 41-2622(c).

"5. Home rule legislation is prohibited in a field of law in which there is a state statute uniformly applicable to all cities or counties. A city or county may not exercise home rule to opt out of a uniform law by charter ordinance; the local ordinance may be contrary to, or in conflict with, a state law only where such state law has a non-uniform application throughout

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