Chapman v. Acqua, et al

• Decision Date: 22 March 2001
• Docket Number: 00-1318
• Citation: 42 S.W.3d 378
• Parties: Linda CHAPMAN v. Elnora BEVILACQUA, et al. 00-1318 Supreme Court of Arkansas Opinion delivered
• Court: Arkansas Supreme Court

Linda CHAPMAN v Elnora BEVILACQUA, et al.

00-1318

Supreme Court of Arkansas

Opinion delivered March 22, 2001

Appeal from Sebastian Chancery Court; Norman Wilkinson, Chancellor; affirmed.

1. Judgment -- summary judgment -- when granted. -- Summary judgment is to be granted by a trial court if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.

2. Judgment -- summary judgment -- shifting burden. -- Once the moving party establishes a prima facie entitlement to summary judgment by affidavits or other supporting documents or depositions, the motion's opponent cannot rely on a bare denial or contrary allegation but must meet proof with proof and demonstrate the existence of a material issue of fact.

3. Judgment -- summary judgment -- appellant's representation that no issues remained was binding. -- Where intervenor City and appellant filed opposing motions for summary judgment, appellant's representation that no issues remained was binding; had appellant believed that there were genuine issues of material fact remaining, she could have merely opposed intervenor City's motion for summary judgment, arguing that there was a genuine issue of material fact, instead of filing a cross-motion for summary judgment.

4. Taxation -- illegal exaction -- any "interested" citizen has standing to bring suit. -- Article 16, Section 13, of the Arkansas Constitution provides that "[a]ny citizen of any county, city or town may institute suit in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever"; this constitutional provision is self-executing and requires no enabling act or supplemental legislation to make its provisions effective; when the language of a constitutional provision is plain and unambiguous, each word must be given its obvious and common meaning, and neither rules of construction nor rules of interpretation may be used to defeat the clear and certain meaning of a constitutional provision; the plain and unambiguous language of Ark. Const. art. 16, § 13, provides that "any" "interested" "citizen" has standing to bring an illegal-exaction case.

5. Taxation -- public-funds cases -- word "interested" broadly construed. --In public-funds cases, the supreme court has given the word "interested" as used in Article 16, Section 13, a very broad construction.

6. Taxation -- illegal exaction -- appellant did not have standing to sue for. -- A governmental subdivision use of funds not derived from state taxpayer monies is not subject to a challenge for unlawful disbursement; appellant did not have standing to sue for illegal exaction for the disbursement of federal taxpayer funds paid into dedicated accounts and not commingled with the City's general fund.

7. Taxation -- illegal exaction -- appellant had standing to challenge intervenor City's expenditure of general fund monies to pay salaries of employees who spent minimal amount of time writing checks for federal program. -- Where certain administrative employees' salaries were paid only from intervenor City's general fund, funded by taxpayer money, and where that cost was not reimbursed by federal programs, the supreme court, observing that the theory of illegal exaction does not have a "de minimis" exception, concluded that appellant had standing to challenge intervenor City's expenditure of general fund monies to pay for the salaries of city employees who spent a minimal amount of time writing checks for the federal program.

8. Municipal corporations -- housing redevelopment statutes -- held constitutional on every challenged basis. -- The supreme court has held housing redevelopment statutes constitutional on every challenged basis, including that a county or city has the constitutional power to donate money for a public purpose in those instances where the General Assembly has designated the activity that is to be benefitted.

9. Taxation -- illegal exaction -- none occurred where expenditures were not unconstitutional. -- Although appellant had standing to challenge the expenditure of funds to pay intervenor City employees, it did not mean that the challenge had merit; Arkansas statutes allowed intervenor City to do exactly what it did in furtherance of a legitimate public purpose, and the supreme court has specifically determined that such expenditures are not unconstitutional under Article 12, § 5, of the Arkansas Constitution; therefore, there was no illegal exaction under Art. 16, § 13, of the Arkansas Constitution. [wbj]

Oscar Stilley, for appellant.

Daily & Woods, P.L.L.C., by: Jerry L. Canfield, for appellee/intervenor.

Jim Hannah, Justice.

Appellant Linda Chapman appeals the trial court's grant of summary judgment to Appellees Elnora Bevilacqua and thirty-one other defendants and the Intervenor City of Fort Smith ("the City") regarding whether the City's disbursement of funds through a housing rehabilitation program violates the Arkansas Constitution as an illegal exaction of the City's general fund. We affirm.

Facts

In the fiscal years 1997 and 1998, the City received from the federal government Community Development Block Grants and Home funds for the rehabilitation of urban dwellings owned by qualifying individuals who applied for the grants. The City, as the implementing agency, carried out the housing rehabilitation programs pursuant to federal and state laws allowing municipalities, counties, or established housing authorities to redevelop urban or rural areas suffering from unsafe, unsanitary, or blighted conditions, as determined by federal guidelines. Under the program, when grant money was used, the property was subject to a recorded guarantee that the rehabilitated housing unit would be used for income-eligible occupants for five years.

Under the plan, the City conducted the disbursement of federal funds so that none of the money involved would be paid directly to the homeowner or to the repair contractor, whose names were both included on the grant checks, so that the beneficiary of the funds would be the dwelling itself and, thus, the community, guaranteeing that the repairs and renovations were made. The procedure for payment required the bid-chosen repair contractor to submit a claim for repayment to the program supervisor with the City, who was paid by federal money to administer the plan. The program supervisor would then process the payment request through the City's finance department, whose employees were paid by the City. The finance department would then request a draw-down of funds from the United States Department of Housing and Urban Development. The money was then wired to the dedicated accounts, and checks were issued to the repair contractor and homeowner jointly.

On November 5, 1999, Chapman filed suit against thirty-two private property owners in the City, seeking to recover from these defendants the value of repairs or rehabilitations of their private property, which had been accomplished in 1997 and 1998 through these federally funded housing programs. Specifically, Chapman alleged that she, as a taxpayer, sought to recover for the City the monies paid to the defendants for rehabilitation of their homes because the money had been unlawfully expended from the Sebastian County Treasury and the City's general fund. Furthermore, Chapman alleged that the defendants were required to replenish the City's general fund when it was exhausted by misappropriation under Arkansas Constitution Art. 12, § 5. Finally, Chapman alleged that "The acts and omissions set forth in this complaint constitute an illegal exaction in the amount of the grants received by each of the Defendants, for which the named Defendants should be required to repay all money which they have received as grants from the City of Fort Smith, Arkansas." Chapman also alleged that the grants constituted an unjust enrichment to each defendant.

The separate defendants filed answers to the complaint within the required time. Some defendants joined together to hire attorneys, while others proceeded individually. On November 15, 1999, the City moved to intervene and, without objection, the court granted the motion on November 22, 1999. The City then filed its answer to Chapman's complaint on December 1, 1999. Over the next several months, the parties exchanged interrogatories and requests for production of documents, with the City spearheading the bulk of discovery. On April 7, 2000, the City filed a motion for summary judgment, attaching as exhibits the testimony from a deposition and three affidavits of City employees who were familiar with the City's implementation of the housing rehabilitation programs. The separate defendants each adopted and joined in the City's motion for summary judgment.

On June 8, 2000, Chapman took the depositions of city employees Garland Bray, Cheryl Turrentine, Matt Jennings, Jackie Joyce, and Jack Baldwin regarding the administration by the City of the housing rehabilitation project. Chapman then responded to the City's motion for summary judgment and filed a cross-motion for summary judgment on June 20, 2000. Thereafter, the City filed a response to Chapman's cross-motion for summary judgment on July 14, 2000, and several of the other defendants either filed additional responses or joined in the City's response.

In its motion for summary judgment, the City first argued that Chapman did not have standing to challenge the administration by the City of the housing rehabilitation project and the distribution of the federal money because she has not personally suffered injury, nor did she belong to a class of people, who had suffered injury or been prejudiced by the distribution of the federal money. The City noted that Chapman had never applied for any...