Gregg v. Whitefish City Council

• Decision Date: 21 September 2004
• Docket Number: No. 03-229.,03-229.
• Citation: 323 Mont. 109,2004 MT 262,99 P.3d 151
• Court: Montana Supreme Court
• Parties: James R. GREGG, et al.; Douglas L. Oliver, et al.; Mark Vannyhuis, et al.; David R. Lauber, et al.; Kay Dean Denning, et al., Plaintiffs and Appellants, v. The WHITEFISH CITY COUNCIL and The City of Whitefish, Defendants and Respondents and Cross-Appellants.

99 P.3d 151

2004 MT 262

323 Mont. 109

James R. GREGG, et al.; Douglas L. Oliver, et al.; Mark Vannyhuis, et al.; David R. Lauber, et al.; Kay Dean Denning, et al., Plaintiffs and Appellants, v. The WHITEFISH CITY COUNCIL and The City of Whitefish, Defendants and Respondents and Cross-Appellants.

No. 03-229.

Supreme Court of Montana.

Submitted on Briefs October 30, 2003.

Decided September 21, 2004.

For Appellants: William E. Astle, Astle & Astle, Kalispell, Montana.

For Respondents: John M. Phelps, Hedman, Hileman & Lacosta, Whitefish, Montana.

Justice JOHN WARNER delivered the Opinion of the Court.

¶ 1 James R. Gregg is one of 277 property owners (Property Owners) who collectively appeals from an order of the Eleventh Judicial District Court, Flathead County, upholding the proceedings of the City of Whitefish (City) to annex their property. The City cross-appeals the District Court's order holding the Property Owners properly sought court review of the annexation proceedings. We affirm.

¶ 2 We address the following issues:

¶ 3 1. Did the District Court err in concluding a recorded waiver of protest to annexation executed by a previous landowner is a covenant running with the land that precludes a current landowner from protesting annexation?

¶ 4 2. Did the District Court err in concluding the City could require consent to annexation for continued receipt of utility services by enacting City of Whitefish Resolution 98-43?

¶ 5 3. Did the District Court err in concluding that in following City of Whitefish Resolution 98-43, the City could imply consent to annexation from Property Owners who continued to receive utility services after the City gave notice requiring them to disconnect the utilities?

¶ 6 4. Did the District Court err in concluding the Property Owners could secure judicial review of the City's annexation procedures under § 7-2-4741, MCA, even though a majority did not successfully protest the annexation under § 7-2-4710, MCA?

¶ 7 5. Did the District Court err in concluding the City met the statutory annexation requirements of Title 7, Chapter 2, Part 47?

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 8 During the final four months of 1998, the City took steps to annex six residential areas contiguous to existing City boundaries. In order to stop the annexations, a majority of property owners in each of the areas protested under § 7-2-4710, MCA. However, after the protests were submitted, the City invalidated a number of the protests on certain grounds, two of which are at issue here. First, the City invalidated protests if a previous landowner had waived the right to protest annexation and the waiver was properly recorded with the county clerk and recorder.¹ Second, the City implied consent to annexation and invalidated protests from property owners who failed to arrange to disconnect from the City water and sewer services after notice of such requirement from the City. After discounting protests, the City determined that a majority of property owners failed to protest in five of the areas, while one of the areas successfully protested the annexation. Of the landowners in those five areas, approximately 78% are on City water or sewer or both, and the majority have been on the City's system for at least 37 years. These five areas were then annexed pursuant to City Ordinance No. 98-11. The City also adopted an Extension of Services Plan and addressed the annexation of each area pursuant to statute.

¶ 9 In January 1999, a majority of the property owners in the five annexed areas filed five separate lawsuits challenging the process of annexation and the sufficiency of the City's Extension of Services Plan. Upon stipulation of the parties, the five cases were consolidated into one. The Property Owners complained in two counts that give rise to this appeal. Count I alleged the City improperly invalidated a number of their protests to annexation. Count II alleged the City's annexation Extension of Services Plan failed to meet specific requirements of Title 7, Chapter 2, Part 47. In response, the City asserted, in part, that if a given Property Owner's protest to annexation was invalid, that property owner could not then request judicial review of the City's subsequent annexation proceedings. Therefore, the City asserted that because a majority of Property Owners failed to protest annexation, the majority required for judicial review was not met and the Property Owners had no standing to assert Count II. The parties stipulated to various facts and submitted the issues to the District Court for decision.

¶ 10 Regarding Count I, the District Court held the City properly invalidated both the protests of landowners whose predecessors in interest had waived the right to protest and the protests of landowners whose consent the City deemed was implied because they did not make plans to disconnect from City water and sewer.

¶ 11 The court held the right to protest annexation was separate from the right to request judicial review. Therefore, the court held the Property Owners could still request judicial review of the City's compliance with Title 7, Chapter 2, Part 47, as alleged in Count II because a majority of property owners were joined in the suit. Regarding Count II, the District Court reviewed ten separate challenges to the City's annexation procedures and held the City properly met the statutory requirements of each one.

¶ 12 The court then upheld all five annexations.

¶ 13 The Property Owners now appeal the rulings invalidating their protests and the rulings upholding the annexations under Title 7. The City cross-appeals the ruling allowing the Property Owners to request judicial review of the statutory annexation requirements. Further facts are discussed below.

II. STANDARD OF REVIEW

¶ 14 Section 7-2-4742, MCA, provides for court review of whether statutory annexation procedures were followed and requirements met. To seek the District Court's review under § 7-2-4742, MCA, the parties stipulated to numerous facts and then simultaneously submitted "trial" briefs on the issues and then both submitted "reply" briefs. In those cases reviewing the propriety of municipal actions under § 7-2-4742, MCA, the proper procedure would be for a party to move for summary judgment if that party believes there are no genuine issues of material fact.

¶ 15 As to our review of whether the City's annexation procedures and plans were in conformity with the law, the parties disagree on the applicable standard of review. The Property Owners assert the District Court and this Court must strictly construe the statutes when reviewing whether an annexation was proper. They cite Pool v. Town of Townsend (1920), 58 Mont. 297, 191 P. 385; Gregory v. City of Forsyth (1980), 187 Mont. 132, 609 P.2d 248; and Nilson Enter., Inc. v. City of Great Falls (1980), 190 Mont. 341, 621 P.2d 466, in support of their strict construction argument. In addition, the Property Owners argue that even though the City is a charter government with self governing powers, the statutory directives of § 7-1-114(1)(a) & (2), MCA, and § 7-2-4742, MCA, limit the City's authority so it must strictly comply with all portions of the annexation statutes.

¶ 16 The City asserts that because it is a self-governing municipality, it is entitled to a presumption that its actions were proper and reasonable doubts are to be resolved in its favor. Art. XI, Sec. 6, Mont. Const.; § 7-1-106, MCA. In addition, the City cites State ex rel. Swart v. Molitor (1981), 190 Mont. 515, 621 P.2d 1100, to argue that although the City must comply with the annexation statutes as indicated by § 7-1-114, MCA, it may act where the statutes are silent. Under Schanz v. City of Billings (1979), 182 Mont. 328, 597 P.2d 67, and § 7-2-4743, MCA, the City argues its annexation ordinances, like legislative enactments, are entitled to a presumption of reasonableness. Finally, the City asserts two of the cases cited by the Property Owners, Gregory and Nilson, do not stand for strict and complete compliance, but instead stand for substantial compliance.

¶ 17 In Gregory, a case in which the City of Forsyth argued the method provided for annexation of territory to a municipality was not exclusive, we stated:

The general rule is that municipal boundaries may be extended only as prescribed by law. 2 McQuillin, Municipal Corporations § 7.14 at 317 (3rd rev. ed.1979). Since the jurisdiction of a city to extend its boundaries is a special power, conferred by the legislature, a substantial compliance with all the mandatory requirements of statutory law is essential. McQuillin, supra, § 7.29 at 422; Pool v. Town of Townsend (1920), 58 Mont. 297, 304, 191 P. 385, 386.

Gregory, 187 Mont. at 135, 609 P.2d at 250. Thus, we concluded the only way to extend municipal boundaries was that provided by statute. The standard requiring substantial compliance with mandatory statutes was established.

¶ 18 In Nilson, the City of Great Falls annexed land without filing either a land description, a certificate of ownership, or an owner's consent to annexation, as specifically required by statute. The Gregory standard of substantial compliance was reaffirmed by inserting the above quotation. Then, the Court went on to say:

Moreover, we reaffirm this Court's decisions in Pool, Balock[ v. Town of Melstone, 186 Mont. 303, 607 P.2d 545 (1980)] and Gregory, supra. When statutory language provides the manner in which a city or town may annex a portion of contiguous property, it must completely and strictly comply with the statute's requirements. Annexation, and the taxation implications that accompany it, should not be approached lightly. The procedure should not be haphazard. Although Gregory reaffirmed the rule of substantial compliance, the complete failure to secure the documents necessary to the proper annexation of property is not substantial compliance. The complete disregard of the mandates of what is now section

...