Fladung v. City of Boulder

• Decision Date: 18 March 1968
• Docket Number: No. 22997,22997
• Citation: 438 P.2d 688
• Parties: James B. FLADUNG, Individually and as representative of a class similarly situated, Plaintiff in Error, v. CITY OF BOULDER, Colorado, a municipal corporation, Defendant in Error.
• Court: Colorado Supreme Court

Page 688

438 P.2d 688

165 Colo. 244

James B. FLADUNG, Individually and as representative of a class similarly situated, Plaintiff in Error, v. CITY OF BOULDER, Colorado, a municipal corporation Defendant in Error.

No. 22997.

Supreme Court of Colorado, En Banc.

March 18, 1968.

Rehearing Denied April 8, 1968.

James H. Snyder, Boulder, for plaintiff in error.

Peter C. Dietze, G. Bryan Morgan, Boulder, for defendant in error.

DAY, Justice.

Do all of the taxpaying electors of the City of Boulder have the right to vote on a bond issue to fund the improvements in a special improvement district, when the repayment thereof is by assessment levied only on the properties benefited in the district?

This is the principal question raised by Fladung on behalf of himself and taxpayers similarly affected in a class action challenging a Boulder city ordinance authorizing such bonds. The ordinance is sought to be declared void for other reasons which also will be discussed. We affirm the judgment of the Boulder district court which by summary judgment dismissed the complaint of plaintiff in error Fladung. He will hereinafter be referred to as plaintiff, and the city of Boulder as the city.

Before addressing ourselves to the main questions directed to the validity of the ordinance, we briefly dispose of two assignments of error dealing with procedural matters in the trial court.

Plaintiff initially argues that the trial court erred in entering summary judgment dismissing his complaint because as a matter of right he was entitled to file an amended complaint under R.C.P.Colo. 15(a). Plaintiff's argument is without merit. The city filed its answer and motion for summary judgment on the same day that plaintiff filed his complaint. Rule 15(a), on which plaintiff relies, provides that the party as a matter of right can amend his pleadings Before a responsive pleading is filed or within twenty days if there is no responsive pleading. Otherwise amendments may be made only by leave of court or with the consent of the adverse party. Board of County Commissioners of Park County v. Bullock, 122 Colo. 218, 220 P.2d 877. Had the city merely filed a motion to dismiss for failure to state a claim, we agree that plaintiff then would be entitled to amend his complaint as a matter of right. Renner v. Chilton, 142 Colo. 454, 351 P.2d 277.

Furthermore, no oral or written motion requesting amendment of the written complaint was made by plaintiff. The matter of the amendment was not raised in plaintiff's motion for new trial. Plaintiff is therefore precluded from raising this question here for the first time.

It is next contended that the court erred in granting summary judgment--it was in fact judgment on the pleadings--with only the complaint, the city's answer and motion before the court at the time of the argument and entry thereof. Plaintiff avers that there was a genuine issue of fact to be tried by the court in relation to his allegation of irregularity in the cost estimates of the improvement project.

The bond ordinance involved herein has no relation to the cost estimates for the district. A prior ordinance which was enacted to create the local improvement district had as a provision thereof the cost estimates of the project. The validity of that ordinance was upheld by this court in Fladung v. City of Boulder, 160 Colo. 271, 417 P.2d 787, wherein we affirmed a judgment of the trial court. Judgment therein was not only res judicata concerning every question actually litigated and decided, but also as to every question which might have been presented and determined. Rogoff v. Charash, 154 Colo. 503, 391 P.2d 680. The parties being the same and the project estimates being a necessary part of the initial ordinance establishing the district, this issue, assuming that it has any merit, could have been and should have been raised in the prior litigation.

Turning now to the matter of voter participation in the bond issue, plaintiff's argument is predicated upon the premise that the ordinance creates a 'debt' of the city and therefore the questions of incurring the debt as well as the term and rate of the interest on the bonds must be submitted to the qualified taxpaying electors because of provisions in Article XI, section 8, of the Colorado constitution, as well as by section 98 of the Boulder city charter. All of the contentions of plaintiff have been answered by this court in Montgomery v. City and County of Denver, 102 Colo. 427, 80 P.2d 434. In that case we were confronted with an almost identical ordinance providing for the issuance of bonds to fund a special improvement district. In the ordinance under consideration in Montgomery, there was, as is the instant case with reference to the ordinance now under consideration, a proviso that when four-fifths of the outstanding bonds have been paid and cancelled, if the remaining assessments are delinquent in payment and there is no paid-in surplus, the city shall then pay the interest and principal on the remaining bonds outstanding. Plaintiff argues that as a result general tax moneys may be involved in accounts pledged to the redemption of the bonds issued. We held in Montgomery that the ordinance providing for the city to take over the payment by advancing the funds therefor if four-fifths of the outstanding bonds have been paid and cancelled arises only on a contingency and is not an obligation as such, because the contingency may never arise. We pointed out in Montgomery that the city is thereafter entitled to reimburse itself from the properties involved for the unpaid assessments, and we further held that such an advancement of general funds does not create a debt within the meaning of the Denver city charter. Article XI, section 8, of the Colorado constitution does not apply to home rule cities. Berman v. City and County of Denver, 156 Colo. 538, 400 P.2d 434. We likewise held in Montgomery that a special improvement district does not create a debt for the city and that it is only when there is such a debt sought to be created that voter approval is necessary. Boulder's charter providing for an election by the qualified taxpaying electors also is limited to bonds creating a Debt of the city of Boulder. We reaffirm our holding in Sanborn v. City of Boulder, 74 Colo. 358, 221 P. 1077, which also answers this contention of plaintiff.

Another constitutional question is raised in relation to section 6 of the ordinance which provides that all bonds are subject to redemption at the option of the city on any interest payment date prior to maturity; and that the city treasurer can call bonds for payment where a credit exists in the district exceeding six months interest. It is argued that this provision violates Article XI, section 8, of the Colorado constitution in permitting the bonds to mature...