City of Whitefish v. Bd. of County Com'Rs

• Decision Date: 23 December 2008
• Docket Number: No. DA 08-0238.,DA 08-0238.
• Citation: 2008 MT 436,347 Mont. 490,199 P.3d 201
• Parties: The CITY OF WHITEFISH, a Municipal Corporation, Plaintiff and Appellant, v. BOARD OF COUNTY COMMISSIONERS OF FLATHEAD COUNTY, the governing body of the County of Flathead, acting by and through Joseph D. BRENNEMAN, Gary D. Hall, and Dale W. Lauman, Respondents and Appellees.
• Court: Montana Supreme Court

199 P.3d 201

2008 MT 436

347 Mont. 490

The CITY OF WHITEFISH, a Municipal Corporation, Plaintiff and Appellant, v. BOARD OF COUNTY COMMISSIONERS OF FLATHEAD COUNTY, the governing body of the County of Flathead, acting by and through Joseph D. BRENNEMAN, Gary D. Hall, and Dale W. Lauman, Respondents and Appellees.

No. DA 08-0238.

Supreme Court of Montana.

Submitted on Briefs November 13, 2008.

Decided December 23, 2008.

For Appellant: John M. Phelps, City Attorney, Whitefish, Montana, Terry N. Trieweiler, Trieweiler Law Firm, Whitefish, Montana.

For Appellee: Alan F. McCormick, Garlington, Lohn & Robinson, PLLP, Missoula, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 The City of Whitefish (City) and the Board of Commissioners for Flathead County (County) entered into an Interlocal Agreement (Agreement) in February 2005. This Agreement memorialized many cooperative planning practices in which the parties had engaged for several decades. It also altered some of these traditional practices and boundaries. In 2008, the County issued a resolution that, among other things, unilaterally rescinded the County's consent to the Agreement in violation of the express terms of the Agreement. The City filed a complaint against the County seeking various forms of relief as well as a preliminary injunction. The Eleventh Judicial District Court denied the injunction and ruled that the Interlocal Agreement was invalid. The City appeals. We reverse and remand.

ISSUE

¶ 2 The dispositive issue on appeal is whether the District Court erred in denying the City's request for a preliminary injunction and by ruling on the underlying legal issue of the case.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 In 1967, the City and County jointly created the Whitefish City-County Planning Board (Board). The Board enjoyed a planning jurisdictional area of four and one-half miles around the City. Additionally, from 1967 to 2005, the City of Whitefish, in accordance with applicable law and with the consent of Flathead County, zoned the perimeter of land circling the City and extending one mile outside of the City limits. This area was called the City's extra-territorial zoning jurisdiction. These jurisdictional areas were created without the execution of a formal interlocal agreement.

¶ 4 In February 2005, after two years of negotiation, the City and County entered into a formal interlocal agreement. Among other things, the Agreement reduced the jurisdiction of the Board to two miles outside of the Whitefish city limits. The Agreement also provided that within these two miles, the City would have sole zoning authority and sole authority to establish and enforce subdivision, floodplain and lakeshore protection regulations, as well as complete authority to adopt and amend a growth policy. Critically, the Agreement required the mutual written agreement of both parties before it could be altered, amended, or terminated. After executing the Agreement, the parties executed two written amendments.

¶ 5 The City asserts that, as a result of the Agreement, it substantially increased its staff, entered into a five-year lease for office space, adopted a new growth policy, annexed Whitefish Lake, zoned hundreds of acres of property, and was processing numerous development and protection applications at the time this dispute arose. In March 2008, the City adopted a "Critical Areas Ordinance" governing the extra-territorial area. The County objected, claiming that the Ordinance adversely impacted many County residents within the City's extra-territorial jurisdiction and that the Ordinance constituted a violation of "the spirit of the Interlocal Agreement." The County, accordingly, adopted a resolution criticizing the Ordinance and unilaterally rescinding its consent to the Agreement.

¶ 6 The City immediately filed the underlying action alleging the County had violated the express termination provisions of the Agreement, thereby breaching the Agreement. The City sought a temporary restraining order and preliminary injunction, restraining the County from taking any action to interfere with the City's jurisdiction of the two-mile area, and seeking a declaration that the Agreement remains in effect, and that the Resolution rescinding it is void. The County responded that it was justified in its action and argued that the mutual termination provisions of the Agreement were invalid because they were contrary to the enabling authority of interlocal agreements and the provisions of §§ 76-2-310 and -311, MCA. In May 2008, the District Court ruled in favor of the County, denied the City's request for a preliminary injunction, and determined the Agreement was invalid. The City appeals.

STANDARD OF REVIEW

¶ 7 While we typically review the grant or denial of a temporary or permanent injunction under the "manifest abuse of discretion" standard (St. James Healthcare v. Cole, 2008 MT 44, ¶ 21, 341 Mont. 368, ¶ 21, 178 P.3d 696, ¶ 21), this deferential standard is inapplicable where, as here, the grant or denial of the injunction is based solely upon conclusions of law. In such a case, no discretion is involved and we review the district court's conclusions of law to determine whether the interpretation of the law is correct. St. James Healthcare ¶ 21. See also M.H. v. Montana High School Ass'n, 280 Mont. 123, 130, 929 P.2d 239, 243 (1996), and Benefis Healthcare v. Great Falls Clinic, 2006 MT 254, ¶ 11, 334 Mont. 86, ¶ 11, 146 P.3d 714, ¶ 11.

DISCUSSION

¶ 8 In seeking a preliminary injunction, the City sought to restrain the County from taking any action to interfere with its jurisdiction until such time as the District Court could resolve whether the resolution unilaterally rescinding the County's participation in the Agreement was void. However, the court addressed and resolved both the merits of the case and the propriety of a preliminary injunction in its decision. The City maintains the court erred in reaching and resolving the ultimate issues of the case at the preliminary injunction phase of the case. We therefore analyze the District Court's disposition of the matter.

¶ 9 The District Court started its analysis by exploring the legal authority for interlocal agreements. The District Court observed that substantial constitutional and statutory authority existed allowing cities and counties to enter into interlocal agreements and share or delegate authority—specifically, Article XI, Section 7 of the Constitution, §§ 7-11-104, 76-1-112, 76-1-504, and 76-2-310, MCA. The court noted, however, that while § 7-11-104, MCA, expressly authorizes creation of interlocal agreements, § § 76-2-310 and -311, MCA, provide that extending zoning and subdivision regulation jurisdiction to a city is authorized "except in locations where a county has adopted zoning or subdivision regulations" and "until the county board adopts a growth policy pursuant to chapter 1 and accompanying zoning or subdivision resolutions that include the area." Therefore, the District Court determined, an agreement may facilitate a city's exercise of extra-territorial jurisdiction for only so long as the county has not adopted a growth policy and zoning or subdivision regulations for the area.

¶ 10 The District Court then turned to the statutes governing preliminary injunctions. The court determined that the City's request for an injunction could not be granted on the following grounds:

• The Agreement was not mutually enforceable. Section 27-19-103(5), MCA, states that an injunction may not be granted to prevent the breach of a contract the performance of which would not be specifically enforced. Section 27-1-414(2), MCA, provides, in relevant part, that neither party to an obligation can be compelled to perform it unless the other party has performed or is compellable specifically to perform everything to which the former is entitled under the same obligation;

• Section 27-19-103(4), MCA, precludes an injunction from being issued to prevent the execution of a public statute by officers of the law for the public benefit; and

• It was unlikely the City would prevail following a trial on the merits as required by § 27-19-201(1), MCA, which provides, in relevant part, that a preliminary injunction may be granted when it appears that the applicant is entitled to the relief demanded.

¶ 11 The District Court ultimately held that the Agreement was invalid, stating "[t]o the extent enforcement of the [Agreement] would prohibit Flathead County from exercising [the] authority reserved to it by the legislature [pursuant to §§ 76-2-310 and -311, MCA], the [A]greement would be prohibited by law and contrary to the constraints of Article XI, Section 7, of the Constitution and Section 7-11-104, MCA."

¶ 12 Relying on established precedent, the City initially argues on appeal that the District Court erred when it decided the merits of the underlying case rather than ruling on the specific request before it, i.e., an application for a preliminary injunction. Turning to the court's legal analysis of the underlying merits, the City further argues that the District Court incorrectly determined that the Agreement was not authorized under § 7-11-104, MCA, based on the court's conclusion that the City did not comply with §§ 76-2-310 and -311, MCA. The City points out that Article XI, Section 7 of the Montana Constitution and § 7-11-104, MCA, actually encourage local governments to cooperate in the exercise of any function or responsibility with one or more other local government units. It further asserts that §§ 76-2-310 and -311, MCA, simply describe how a city and county may deal with extra-territorial planning, zoning, and a subdivision review "in the absence of an agreement"; these statutes in no way limit the power of cities or counties to enter into valid joint agreements to cooperatively perform administrative services.

¶ 13 Moreover, the City claims the District Court's analysis of...