City of Jacksonville v. City of Sherwood

• Decision Date: 13 November 2008
• Docket Number: No. 08-386.,08-386.
• Citation: 375 Ark. 107,289 S.W.3d 90
• Parties: CITY OF JACKSONVILLE, Arkansas, Appellant, v. CITY OF SHERWOOD, Arkansas, Sherwood Holding Co., LLC, Metropolitan Realty & Development, LLC, Lilac, LLC, Greg Heslep, and Michael B. Clayton, Appellees.
• Court: Arkansas Supreme Court

289 S.W.3d 90

375 Ark. 107

CITY OF JACKSONVILLE, Arkansas, Appellant, v. CITY OF SHERWOOD, Arkansas, Sherwood Holding Co., LLC, Metropolitan Realty & Development, LLC, Lilac, LLC, Greg Heslep, and Michael B. Clayton, Appellees.

No. 08-386.

Supreme Court of Arkansas.

November 13, 2008.

Robert E. Bamburg, for appellant.

Stephen R. Giles, for appellees.

JIM GUNTER, Justice.

This appeal arises from a September 11, 2007 judgment of the Pulaski County Circuit Court affirming the Pulaski County Court's decision to grant Appellees' petition for annexation. We affirm the rulings of the circuit court.

On May 11, 2006, Appellee landowners Sherwood Holding Company, LLC, Metropolitan Development, LLC, LILAC, LLC, and Greg Heslep petitioned for four tracts of real property totaling approximately 1951 acres to be annexed into the City of Sherwood. Sherwood Holding Co. is the owner of Tract 1, Metropolitan Realty & Development is the owner of Tract 2, LILAC is the owner of Tract 3, and Heslep is the owner of Tract 4. Tract 1, containing approximately 640 acres, is contiguous with the northern boundary of Sherwood. Tract 2, containing approximately 589 acres, is contiguous with Tract 1. Tract 3, containing 608 acres, and Tract 4, containing 112 acres, are contiguous by virtue of their connection with Tract 1. Appellee Michael Clayton is the authorized agent appointed by the landowners, and also serves as Sherwood's city engineer.

Appellant City of Jacksonville submitted a resolution opposing the annexation of the properties into Sherwood. On June 20, 2006, a hearing was held regarding the petition for annexation in Pulaski County Court. The county court granted annexation on August 3, 2006. Appellant appealed this order to the Pulaski County Circuit Court. The circuit court held a bench trial on May 30, 2007. On May 31, 2007, the circuit court entered its judgment, affirming the order of the county court and approving the annexation of Tracts 1, 2, 3, and 4. Appellant now appeals.

On appeal, Appellant asserts that (1) the circuit court erred in affirming and approving the annexation of Appellees' properties into the City of Sherwood by the county court because there was insufficient proof presented to the county court to make a determination of the Vestal criteria; (2) the circuit court erred in its application of the Vestal criteria by failing to complete an established statutory and case law criteria assessment of what is right, proper, and reasonable in an annexation; and (3) the circuit court erred in granting Appellees' petition for annexation in ruling that Ark.Code Ann. § 14-56-413 and § 14-56-426 do not prohibit annexation into Sherwood those portions of Tracts 1, 2, and 3, which lie within Jacksonville's extraterritorial planning jurisdiction and the air installation compatible use zones ("AICUZ zones").

The five criteria used to decide if annexation is proper were set out by this court in Vestal v. City of Little Rock, 54 Ark. 321, 15 S.W. 891 (1891):

(1) Whether the property is platted and held for sale or use as municipal lots;

(2) Whether platted or not, if the lands are held to be sold as suburban property;

(3) Whether the lands furnish the abode for a densely settled community or represent the actual growth of the municipality beyond its legal boundary;

(4) Whether the lands are needed for any proper municipal purposes such as for the extension of needed police regulation; and

(5) Whether the lands are valuable by reason of their adaptability for prospective municipal uses.

See also Ark.Code Ann. § 14-40-603(a) (Repl.1998) (requiring that the prayer of the petitioner for annexation be "right and proper").

We have stated that these five criteria should be considered in the disjunctive, and an annexation is proper if any one of the five factors is met. Town of Houston v. Carden, 332 Ark. 340, 965 S.W.2d 131 (1998); Gay v. City of Springdale, 298 Ark. 554, 769 S.W.2d 740 (1989) (Gay II); Lee v. City of Pine Bluff, 289 Ark. 204, 710 S.W.2d 205 (1986); Gay v. City of Springdale, 287 Ark. 55, 696 S.W.2d 723 (1985) (Gay I). The criteria apply regardless of whether the annexation proceeding was initiated by the city or by adjoining landowners. Town of Houston, supra; Chastain v. Davis, 294 Ark. 134, 741 S.W.2d 632 (1987); Louallen v. Miller, 229 Ark. 679, 317 S.W.2d 710 (1958); Cantrell v. Vaughn, 228 Ark. 202, 306 S.W.2d 863 (1957). If a part of the proposed area does not meet one of the five requirements, the annexation of the entire area is void in toto. Town of Houston, supra; Gay II, supra; Chastain, supra; Chappell v. City of Russellville, 288 Ark. 261, 704 S.W.2d 166 (1986).

Appellant first asserts that the circuit court's order was an affirmance of a flawed county court ruling because there was insufficient proof presented to the county court to make a determination of the Vestal criteria. In response, Appellees contend that, regardless of how the proceeding was initiated, the circuit court properly treated this action as an independent attack on the annexation by holding a trial de novo.

Appellant filed a complaint in the circuit court to prevent the annexation, and it is our responsibility to determine whether the circuit court's findings of fact are clearly erroneous. See City of Dover v. Russellville, 346 Ark. 279, 57 S.W.3d 171 (2001). Because our review is one from the circuit court, we are unable to address Appellant's argument on this issue because it erroneously seeks our review of the county court proceeding. Id.

For its next argument, Appellant asserts that the circuit court erred in its application of the Vestal criteria by failing to complete the established statutory and case-law criteria assessment of what is right, proper, and reasonable in an annexation. In response, Appellees contend that Appellant has failed to meet its burden of proof that the lands proposed for annexation do not meet any one of the statutory requirements of § 14-40-302 and Vestal.

Tracts 1 through 4 contain raw timberland and/or flood-plain acreage ranging from 112 acres to 640 acres. This general area lies between the cities of Sherwood and Jacksonville, with tracts divided by Bayou Meto, a natural waterway. Appellant asserts that the property east of Bayou Meto is part of the natural growth pattern for Jacksonville and should not be annexed into Sherwood. Appellant contends that the circuit court failed to complete an assessment of the four tracts under the Vestal criteria and did not address the factors of reasonableness set out in City of Marion v. Guaranty Loan & Real Estate Co., 75 Ark.App. 427, 58 S.W.3d 410 (2001).

It is Appellant's burden to demonstrate that the land fails to meet at least one of the criteria of Ark.Code Ann. § 14-40-302, also known as the Vestal criteria. See Town of Houston, supra. The circuit court concluded that the land met two of the requirements: (1) the land is held to be sold as suburban property; and (2) the land is valuable by reason of its adaptability for prospective municipal purposes.

Testimony from the trial supports the circuit court's conclusion. Steve Deere, a real estate developer and President of Sherwood Holding Company, testified that the company intended to "probably develop mainly residential housing in that area." Terry Paff, President of Metropolitan Realty and Development, testified that "[w]e develop residential subdivisions, which is the biggest part of our plan with this property." Andrew Collins, President of Cypress Properties, which manages Lilac, LLC, testified that he was aware that any development in the area would have to be approved by the Jacksonville Planning Commission. Greg Heslep, real estate developer and owner of Tract 4, testified that he planned to develop his land as commercial and multi-family developments. All four real estate developers testified that they thought that their land would be more valuable in the City of Sherwood rather than in an unincorporated area. They also stated that they were aware of, and would comply with, Sherwood's land development regulations and Jacksonville's zoning regulations designed to protect the fly zone of the Little Rock Air Force Base.

Michael Clayton, Sherwood's city engineer, testified that he was appointed as the agent for the landowners. According to Clayton, Sherwood Wastewater had passed a one-cent sales tax dedicated for sewer system improvements and conducted a feasibility analysis for sanitary sewer for Tracts 1 through 4. He testified that they have approximately $2.2 million dollars set aside for a "skeleton sewer system." He also testified that the City of Sherwood is preparing to extend utilities and to provide fire and police protection to the annexed areas.

Dwight Pattison, the planning consultant for the city of Sherwood, testified that the city adopted a "master street plan" and "land use plan," which primarily show residential development for the annexed areas. He further testified that "the recommended area's highest use is suburban development." According to Pattison, the only area remaining for Sherwood to expand is the area north of its boundaries. "This annexation represents the actual growth of Sherwood beyond its boundaries." Based on the above testimony, the circuit court was not clearly erroneous in finding that the land is being held for development as suburban property and that the land is adaptable for prospective municipal purposes. Since at least one of the Vestal criteria has been met, we hold that annexation was proper.

Appellant also asserts that the circuit court failed to address the reasonableness factors set out in Marion, supra. In Marion, the Arkansas Court of Appeals analyzed the Vestal criteria and also a reasonableness standard utilized by other jurisdictions to determine whether annexation was "right and proper." First, the circuit court did not address the Marion reasonableness standard in its order. The failure to obtain a ruling...