City of Waukee v. City Development Bd.

• Citation: 514 N.W.2d 83
• Decision Date: 23 March 1994
• Docket Number: No. 92-886,92-886
• Parties: CITY OF WAUKEE, Iowa, A Municipality, Appellee, v. CITY DEVELOPMENT BOARD, Appellant, City of Clive, Iowa, Intervenor-Appellant.
• Court: Iowa Supreme Court

Page 83

514 N.W.2d 83

CITY OF WAUKEE, Iowa, A Municipality, Appellee, v. CITY DEVELOPMENT BOARD, Appellant City of Clive, Iowa, Intervenor-Appellant.

No. 92-886.

Supreme Court of Iowa.

March 23, 1994.

James C. Wine of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C., Des Moines, for appellant City of Clive.

Bonnie J. Campbell, Atty. Gen., and Christie J. Scase, Asst. Atty. Gen., for appellant City Development Bd.

Paul E. Huscher and Paul R. Huscher, Des Moines, for appellee.

Considered by McGIVERIN, C.J., and LARSON, CARTER, SNELL, and TERNUS, JJ.

SNELL, Justice.

I. Introduction

This dispute stems from the competing annexation applications of two cities, the City of Clive (Clive), and the City of Waukee (Waukee), for territory located in Dallas County. Appellee, Waukee, petitioned the Dallas County District Court for judicial review of appellant City Development Board's (CDB) failure to approve its voluntary annexation application within the time period required pursuant to Iowa Code section 368.7 (Supp.1991).

The district court remanded Waukee's application to the CDB and ordered the board to approve it. The CDB and Clive raise two issues on appeal. First, whether the doctrine of exhaustion of administrative remedies barred the district court's exercise of appellate jurisdiction over this matter. Second, whether the district court exceeded its jurisdiction in ordering the CDB to approve Waukee's voluntary application.

II. Standard of Review

Our scope of review in this case is limited by Iowa Code sections 17A.19, 17A.20, and 368.22 (1991). Section 368.22 provides:

A city ... may appeal a decision of the board ... to the district court of a county which contains a portion of any city or territory involved.

....

... The judicial review provisions of this section and of chapter 17A shall be the exclusive means by which a person or party who is aggrieved or adversely affected by agency action may seek judicial review of that agency action. The court's review on appeal of a decision is limited to questions relating to jurisdiction, regularity of proceedings, and whether the decision appealed from is arbitrary, unreasonable, or without substantial supporting evidence. The court may reverse and remand a decision of the board ... with appropriate directions. The following portions of section 17A.19 are not applicable to this chapter:

. . .

3. Subsection 8.

Iowa Code § 368.22. We strictly construe statutes delineating a court's appellate jurisdiction with regard to administrative appeals. See Morrison v. Century Eng'g, 434 N.W.2d 874, 876 (Iowa 1989); Abel v. Iowa Dep't of Personnel, 472 N.W.2d 281, 282 (Iowa 1991). Thus, our review is limited to "questions relating to jurisdiction, regularity of proceedings, and whether the decision appealed from is arbitrary, unreasonable, or without substantial supporting evidence." Iowa Code § 368.22.

III. History of Case

Clive and Waukee filed applications to annex certain territory located within Dallas County, Iowa. Clive filed an "involuntary application." Involuntary annexation applications are those filed without the support of all landowners in the territory to be annexed. See Iowa Code § 368.11 (Supp.1991). Waukee filed voluntary applications. Voluntary applications are those filed by all the landowners in the subject territory. See id. § 368.7. Waukee filed its voluntary applications between April 25, 1990 and May 8, 1990.

Waukee's voluntary applications were still pending before the board in November 1990. On November 8, 1990 Waukee sought a writ of mandamus from the Dallas County District Court directing the CDB to approve Waukee's voluntary annexation applications. The district court denied that writ. Waukee then filed a petition for judicial review of agency action with the district court. These events occurred on or before June 10, 1991.

On June 10, 1991, the Iowa legislature amended various provisions of Iowa Code chapter 368. 1991 Iowa Acts ch. 250 (hereinafter referred to as "Senate File 4"). Senate File 4, in relevant part, provided the following:

Sec. 2. NEW SECTION. 368.6 INTENT.

It is the intent of the general assembly to provide an annexation approval procedure which gives due consideration to the wishes of the residents of territory to be annexed, and to the interests of the residents of all territories affected by an annexation. The general assembly presumes that a voluntary annexation of territory more closely reflects the wishes of the residents of territory to be annexed, and, therefore, intends that the annexation approval procedure include a presumption of validity for voluntary annexation approval.

....

Sec. 4. Section 368.7, Code 1991, is amended by adding the following new unnumbered paragraph:

New Unnumbered Paragraph. If one or more applications for a voluntary annexation and one or more petitions for an involuntary annexation for a common territory are submitted to the board within thirty days of each other, the board shall approve the application for voluntary annexation, provided that the application meets the applicable requirements of this chapter, unless the board determines by a preponderance of the evidence that the application was filed in bad faith, or that the application as filed is contrary to the best interests of the citizens of the urbanized area, or that the applicant cannot within a reasonable period of time meet its obligation to provide services to the territory to be annexed sufficient to meet the needs of the territory.... The decision of the board under this paragraph shall be made within ninety days of receipt of the application by the board. The failure of the board to approve an application under this paragraph shall be deemed final agency action subject to judicial review.... Judicial review of a board decision under this paragraph shall be limited to review of the testimony and documents presented to the board prior to issuing its decision on the application for voluntary annexation.

Id. §§ 2, 4.

Senate File 4 also changed the composition of the CDB from a three to a five member board. Id. § 5. Moreover, the legislature provided for the retroactive application of the amendment to applications pending before the CDB on or after April 1, 1991. Id. § 11(2). Waukee viewed Senate File 4's enactment as a direct legislative mandate aimed at the CDB compelling the board to approve Waukee's pending voluntary annexation application. Relying on its belief, Waukee dismissed its petition for judicial review pending before the Dallas County District Court without prejudice.

On October 4, 1991, Waukee again filed a petition for judicial review of agency action with the district court. Waukee's petition alleged the CDB failed to approve its voluntary annexation application within the ninety-day statutory period provided by Senate File 4. Id. § 4. The district court exercised jurisdiction over the matter pursuant to the judicial review provisions of Senate File 4, section 4. Id.

The district court held Waukee exhausted its administrative remedies under chapter 368. The district court premised its holding on the legal conclusion that the ninety-day decision making requirement of Senate File 4 prescribed a mandatory obligation. It further concluded the ninety-day period was to be calculated from July 5, 1991--the date the CDB itself "remanded" the applications to the "new" five member board for consideration. The district court held that under Senate File 4, section 4, the CDB's failure to approve Waukee's voluntary application by October 4, 1991, by which time the ninety days, calculated from July 5, 1991, had expired, constituted final agency action subject to judicial review.

Moreover, the district court believed that merely remanding the case to the board was an inadequate remedy for Waukee. The district court held the CDB abused its discretion by failing to approve Waukee's voluntary applications. Pursuant to Iowa Code section 17A.19(8), the district court remanded the case to the CDB "for the sole purpose of granting [Waukee's] applications for annexation."

IV. Discussion of Law

A. Exhaustion of Administrative Remedies.

Iowa Code section 17A.19(1) provides that "[a] person or party who has exhausted all adequate administrative remedies and who is aggrieved or adversely affected by any final agency action is entitled to judicial review thereof under this chapter."

The doctrine of exhaustion of administrative remedies applies " 'where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course.' " Rowen v. LeMars Mut. Ins. Co., 230 N.W.2d 905, 909 (Iowa 1975) (quoting United States v. Western Pac. R.R., 352 U.S. 59, 63-64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126, 132 (1956)). The exhaustion question in this case is whether the administrative process established by chapter 368 ran its course before the district court exercised jurisdiction over the matter. The determination of this question requires the resolution of two subissues. First, we must determine the effect of Senate File 4's requirement that a decision be made by the CDB within ninety days. Second, we must determine when the CDB legally received Waukee's voluntary annexation application in the context of the compositional changes made to the CDB pursuant to Senate File 4.

1. Effect of Statutory Language. Regarding the first subissue, the parties have framed competing arguments emanating from an analysis of whether the language in Senate File 4 is mandatory or directory. Waukee claims the CDB had to act on its voluntary petition within ninety days; Clive and the board say it was discretionary. Mandatory and directory statutes each impose duties. The distinction between the two types of statutes lies in the consequences of a party's failure to perform the duty. Taylor v. Dep't of Transp., 260 N.W.2d 521, 522 (Iowa 1977)....