City of Rapid City v. Estes

• Decision Date: 23 December 2011
• Docket Number: No. 25868.,25868.
• Parties: CITY OF RAPID CITY, a municipal corporation, Plaintiff and Appellant, v. Doyle ESTES, individually, Big Sky, LLC and Dakota Heartland, Inc., Defendants and Appellees.
• Court: South Dakota Supreme Court

2011 S.D. 75

805 N.W.2d 714

CITY OF RAPID CITY, a municipal corporation, Plaintiff and Appellant,

v.Doyle ESTES, individually, Big Sky, LLC and Dakota Heartland, Inc., Defendants and Appellees.

No. 25868.

Supreme Court of South Dakota.

Considered on Briefs Aug. 22, 2011.Decided Nov. 16, 2011.Rehearing Denied Dec. 23, 2011.

John K. Nooney, Aaron T. Galloway of Nooney, Solay & Van Norman, LLP, Rapid City, South Dakota, Attorneys for plaintiff and appellant.

Edward C. Carpenter, Stephen C. Hoffman of Costello, Porter, Hill, Heisterkamp, Bushnell & Carpenter, LLP, Rapid City, South Dakota, Attorneys for defendants and appellees.

GILBERTSON, Chief Justice.

[¶ 1.] Rapid City (City) Ordinances require a developer to complete certain public improvements before the City accepts a final plat. In lieu of completing the improvements before the City accepts a plat, the City may accept a surety from a developer. In this case, Doyle Estes; Big Sky, LLC; and Dakota Heartland, Inc. (collectively “Developers”) provided sureties which the City accepted. The sureties expired. The City sued Developers, seeking relief to have the required public improvements completed or repaired to meet the City's standards. The circuit court granted summary judgment in favor of Developers. We reverse and remand.

FACTS

[¶ 2.] Developers were involved in developing the Big Sky subdivision in Rapid City, South Dakota. Under SDCL 11–6–26, a municipality has extraterritorial jurisdiction to regulate the subdivision of all land within three miles of the municipality's corporate limits.¹ Under SDCL 11–6–27 ² the City adopted Chapter 16 of Rapid City Municipal Code (RCMC). Chapter 16 establishes regulations governing the subdivision of land within the City's jurisdiction.

[¶ 3.] RCMC 16.16.010 requires subdividers to install or construct certain public improvements:

A. The subdivider is required to install or construct the improvements hereinafter described prior to receiving approval of his or her final plat or prior to having released bond or other securities which guarantee the required improvements.

B. All improvements required under these regulations shall be constructed in accordance with City Specifications and under the inspection of the City Engineer or his or her duly authorized representative.

RCMC 16.16.010. “Improvements” include streets, curbs, gutters, property markers, sidewalks, street lights, traffic signs, water mains, sanitary sewers, and storm sewers. RCMC 16.16.020–.090. The City adopted Standard Specifications for Public Works Construction (Specifications) that improvements were required to meet.

[¶ 4.] The RCMC provided an alternative to prior construction of required improvements before approval of final plats would be considered. RCMC 16.20.060 provides:

A. No final plat shall be approved by the Common Council or accepted for record by the Register of Deeds until all the preceding required improvements listed shall be constructed in a satisfactory manner and approved by the Director of Public Works or his or her designee; or in lieu of the prior construction, the Common Council may accept a security bond in an amount equal to the estimated cost of installation of the required improvements, whereby the improvements will be made and utilities installed without cost to the city in the event of default of the subdivider.³

B. If the final plat is for transfer of title and is so designated, the Common Council may approve other methods, in lieu of actual completion or bonds, whereby the city is put in assured position that all the improvements will be made before the land is developed. All bonds and other methods of guarantee shall be approved by the City Attorney.(Emphasis added.)

[¶ 5.] After improvements are completed, the City's Specifications address project acceptance:

Final acceptance of the project by the Owner [City] will be documented by the issuance of an acceptance letter, which is issued according to the following criteria:

1) Construction has been substantially completed and the facilities can be put to their intended use.

2) All testing has been completed, and the required results have been met.

The date of the acceptance letter documents the start of the two-year warranty period, during which the Contractor shall be notified in writing of any defects in the project and shall correct the defects at his expense....

RCMC Specifications, § 7.65 (emphasis added). This section was revised in June 2006 to clarify that the “contractor/subdivider/developer” is responsible for improvement repairs.⁴

[¶ 6.] Developers applied for approval of 15 subdivision plats. All of the subdivision improvements were either completed or surety was posted to guarantee completion of the improvements. Each plat was approved by the City between 1998 and 2005.

[¶ 7] The City conducted final inspections of the required public improvements for some of the properties. After the inspections the City provided a “punch list” identifying deficiencies.⁵ The areas marked as deficient needed to be corrected before the City would formally accept ownership and maintenance of the public improvements. No follow-up inspections were completed. The remaining properties identified in this suit have never undergone a final inspection.

[¶ 8.] The sureties expired. Developers claim to have spent $5,160,000.00 in payments to independent contractors and engineers to install public improvements in the subdivisions and paid $77,400.00 to the City for inspections of these improvements. The City has never formally accepted ownership or maintenance responsibility for any of the public improvements on the properties. No “acceptance letter” was sent to Developers as indicated in Specifications § 7.65. Developers contend that they informed the sub-contractors of the deficiencies but repair efforts either failed or were not undertaken.

[¶ 9.] The City filed suit in 2008. The City claims there are major deficiencies in the properties. The City alleges that Developers failed to satisfy their obligations on numerous plats to build or correct public improvements. The City seeks injunctive relief to require Developers to complete certain improvement obligations and repair any deficiencies, subject to a final inspection by the City. Alternatively, the City requests the court order Developers “to specifically perform their obligations under the City's subdivision ordinances.” Developers filed for summary judgment, asserting that when the sureties expired, they were no longer liable for the improvements under RCMC 16.20.060. The circuit court granted summary judgment in favor of Developers. On appeal, we address whether the circuit court erred in granting summary judgment in favor of Developers.⁶

STANDARD OF REVIEW

[¶ 10.] The standard of review for a grant or denial of a motion for summary judgment is settled.

In reviewing a grant or a denial of summary judgment under SDCL 15–6–56(c), we determine whether the moving party has demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. In considering a trial court's grant or denial of summary judgment, this Court will affirm only if all legal questions have been decided correctly.

Muhlbauer v. Estate of Olson, 2011 S.D. 42, ¶ 7, 801 N.W.2d 446, 448 (quoting Bertelsen v. Allstate Ins. Co., 2011 S.D. 13, ¶ 5, 796 N.W.2d 685, 692–93). “All reasonable inferences drawn from the facts must be viewed in favor of the non-moving party.” Benson Living Trust v. Physicians Office Bldg. Inc., 2011 S.D. 30, ¶ 9, 800 N.W.2d 340, 342–43.

ANALYSIS

[¶ 11.] The circuit court granted Developers' motion for summary judgment after Developers argued that, under RCMC 16.20.060, the expiration of the sureties released them from their obligations to complete the public improvements. The City argues that the circuit court erred because when reading all the ordinances together, the expiration of the sureties did not relieve Developers of their obligation to construct the improvements according to the City's Specifications.⁷

[¶ 12.] This is a case of statutory and ordinance construction.

The purpose of statutory construction is to discover the true intention of the law, which is to be ascertained primarily from the language expressed in the statute. The intent of a statute is determined from what the Legislature said, rather than what the courts think it should have said, and the court must confine itself to the language used. Words and phrases in a statute must be given their plain meaning and effect.

State ex rel. Dep't of Transp. v. Clark, 2011 S.D. 20, ¶ 5, 798 N.W.2d 160, 162. In this case we have several statutes and municipal ordinances governing the acceptance of public improvements. “To determine legislative intent, this Court will take other statutes on the same subject matter into consideration and read the statutes together, or in pari materia” Onnen v. Sioux Falls Indep. Sch. Dist. No. 49–5, 2011 S.D. 45, ¶ 16, 801 N.W.2d 752, 756 (citing Loesch v. City of Huron, 2006 S.D. 93, ¶ 8, 723 N.W.2d 694, 697). “Statutes are construed to be in pari materia when they relate to the same person or thing, to the same class of person or things, or have the same purpose or object.”

Goetz v. State, 2001 S.D. 138, ¶ 26, 636 N.W.2d 675, 683.

[¶ 13.] RCMC 16.16.010(B) states that: “All improvements required under these regulations shall be constructed in accordance with City Specifications and under the inspection of the City Engineer or his or her duly authorized representative.” (Emphasis added.) Specifications § 7.65 clearly states that “[f]inal acceptance of the project by the Owner [City] will be documented by the issuance of an acceptance letter....” ⁸ It is undisputed that the City never issued any final acceptance letters as referenced in the Specifications. The provision of RCMC 16.20.060 allowing a surety to be posted in lieu of prior construction does not override the...