Hagfeldt v. City of Bozeman

• Decision Date: 25 April 1988
• Docket Number: No. 87-462,87-462
• Citation: 757 P.2d 753,231 Mont. 417
• Parties: Doug L. HAGFELDT and Annette E. Hagfeldt, Plaintiffs and Appellants, v. CITY OF BOZEMAN, Montana, Defendant and Respondent.
• Court: Montana Supreme Court

Page 753

757 P.2d 753

231 Mont. 417

Doug L. HAGFELDT and Annette E. Hagfeldt, Plaintiffs and Appellants, v.CITY OF BOZEMAN, Montana, Defendant and Respondent.

No. 87-462.

Supreme Court of Montana.

Submitted on Briefs Feb. 18, 1988.

Decided April 25, 1988.

Ben Berg, Jr., Berg, Stokes, Tollefsen & Hayes, P.C., Bozeman, for plaintiffs and appellants.

Sarah M. Power, Gough, Shanahan, Johnson & Waterman, Helena, for defendant and respondent.

GULBRANDSON, Justice.

This is an appeal from an order of the Eighteenth Judicial District Court, Gallatin County, granting the City of Bozeman's (City)motion for summary judgment on grounds it sufficiently complied with statutory mandate in this class action claim brought by a number of Bozeman landowners (Landowners).We affirm.

The only issue for consideration is whether the City legally complied with the requirements of Sec. 76-2-402,MCA(1987), when it constructed a water tank contrary to its zoning regulations.

Both parties agree there is no question of fact and summary judgment is appropriate as a matter of law.This appeal is based on the contention that the District Court should have granted the Landowners' motion for summary judgment rather than the City's.

In April of 1985, the City began construction on a water tank in Josephine Park in Bozeman, Montana.This park is located in an area known as Graf's First Subdivision, Second Filing.The surrounding neighborhood and the land on which the tank was constructed are zoned R-2, single family dwellings and other permitted and conditional uses.

The record indicates that a public hearing was held before the Bozeman City-County Planning Board to review the preliminary plat of Graf's First Subdivision, Second Filing, on February 10, 1983.At this hearing, the public was notified that the City planned to construct the water storage facility involved in this action.

Plaintiffs are a number of landowners who live close to the area where the water tank was constructed.Landowners claim the City constructed the tank in violation of zoning regulations and because of this construction, the value of their property decreased.To support its defense, the City argues it is exempt from zoning regulations and relies on Sec. 76-2-402, MCA, which provides as follows:

Whenever an agency proposes to use public land contrary to local zoning regulations, a public hearing, as defined below, shall be held.

(1) The local board of adjustments, as provided in this chapter, shall hold a hearing within 30 days of the date the agency gives notice to the board of its intent to develop land contrary to local zoning regulations.

(2) The board shall have no power to deny the proposed use but shall act only to allow a public forum for comment on the proposed use.

Of further importance is the definitional section for this statute, Sec. 76-2-401, MCA, which provides:

As used in 76-2-402, the following definitions apply:

(1)"Agency" means a board, bureau, commission, department, an authority, or other entity of state or local government

* * *

Landowners claim that under Sec. 76-2-402, the City had an obligation to hold a public meeting prior to commencement of the April, 1985 construction of the water tank.Landowners claim the language "proposes to use" and "intent to develop" shows the statute cannot be applied in a retroactive fashion.

The City attached affidavits to its memorandum in support of its motion for summary judgment showing it held a public meeting on June 24, 1985.It claims the meeting was sufficient to satisfy the statutory mandate and, nonetheless, it is exempt from any ordinance because of the legislative intent and history of Sec. 76-2-402, MCA.Alternatively, the City claims the action is barred under the provisions of Sec. 2-9-111, MCA, because it is a governmental entity "immune from suit for an act or omission of its ... member, officer, or agent" of the legislative body.

These claims raise interesting points that have not been addressed by this Court.Landowners rely on two cases.In Rich v. City of Englewood(Colo.App.1982), 657 P.2d 961, the Colorado Court of Appeals affirmed an injunction prohibiting the construction of a water tank that did not comply with local footage setback requirements.That decision, however, specifically points out that "an injunction is an appropriate remedy for violations of zoning ordinances."Rich, 657 P.2d at 962.Here, it is unclear what remedy the Landowners seek.There is no prayer for damages in the complaint and injunctive relief is not sought.Further, the reasoning in Rich was questioned by the Colorado Supreme Court in the subsequent case of City of Englewood v. Rich(Colo.1984), 686 P.2d 780, because the Englewood City Council amended its zoning ordinance expressly exempting the city from the zoning regulations thereby making the issue moot according to the court.

The second case cited by Landowners, Hunke v. Foote(Idaho1962), 373 P.2d 322, was a proceeding by residents for a writ of mandamus to force the city to remove an electrical substation that the city constructed in violation of its zoning ordinances.The Idaho Supreme Court applied a "governmental-proprietary" function distinction and denied the city an exemption from the zoning ordinance.The court stated "[w]hen operating in its proprietary capacity a municipal corporation is subject to the same burdens, responsibilities and liabilities as a private corporation or individual acting in the same capacity."Hunke, 373 P.2d at 323.We find the rationale of these cases insufficient to decide the issue before us.

Much has been written concerning exemption of a governmental agency from zoning ordinances although the vast majority of legal prose has dealt with two opposing governmental agencies, one of which wishes to be exempt from the other's zoning requirements.See2 Anderson, American Law of Zoning, Secs. 12.02-12.04 (3d ed. 1986);Note, Governmental Immunity from Zoning, 22 B.C.L.Rev. 783(1980-81);Note, Governmental Immunity From Local Zoning Ordinances, 84 Harv.L.Rev. 869(1971).A survey of the case law in existence unfurls four basic theories by which courts of this country have addressed this issue.

The general rule is that municipalities are granted exemption from zoning ordinances in modulating degrees depending on the theory of exemption of the jurisdiction.82 Am.Jur.2d, Zoning and PlanningSecs. 149, 150, 152 and 153(1976) indicates that municipalities are exempt: (1) by express language in the ordinance itself; (2) by immunity of the sovereign from suit; (3) by the distinction between the entity exercising a governmental or proprietary function; and (4) by the doctrine of eminent domain.In application of any of these tests, as the commentators have complained, problems are rampant.

The governmental-proprietary distinction test is most prevalent, but it is not without fault.

"Governmental functions" are those conferred or imposed upon the municipality as a local agency of limited and prescribed jurisdiction to be employed in administering the affairs of the state and promoting the public welfare ... When a municipal corporation engages in an activity of business, rather than one of a governmental nature, such as the supply of light or water or the operation of a railroad which is generally engaged in by individuals or private corporations, it acts as such corporation and not in its sovereign capacity [proprietary].

State ex rel. Gebhardt v. City Council of Helena(1936), 102 Mont. 27, 35-36, 55 P.2d 671, 675.

This distinction has been criticized as oversimplistic and illusory.The wisdom of the governmental-proprietary function test is subject to question.City of Temple Terrace v. Hillsborough Ass'n for Retarded Citizens(Fla.App.1975), 322 So.2d 571, 577, aff'd.(Fla.1976), 332 So.2d 610;Township of Washington v. Village of Ridgewood(1958), 26 N.J. 578, 141 A.2d 308. 2 Anderson, American Law of Zoning, Sec. 12.03, pp. 481-482(1986) accurately shows the problem with the proprietary-governmental distinction, especially as it applies to the issue we are faced with here:

A municipality may carry out its governmental functions without regard to zoning restrictions, but it is subject to such restrictions when it is engaged in a proprietary function.The great difficulty lies in determining which functions are governmental, and which are proprietary.The distinction is of ancient vintage, but it is neither clear nor stable.What is regarded as governmental for one purpose ... is not necessarily so regarded for a different purpose.And a proprietary function of a municipal government of 1955 may become a governmental function in 1965 ... A North Carolina court held that the erection of a water tank is a governmental function which may be carried out without regard to local zoning regulations.The same result was reached by the Supreme Court of Kansas, with some aid from a state statute.The courts of Alabama, Florida, Illinois, Michigan and Pennsylvania have described the municipal water service as a proprietary function which must be carried out consistently with the municipal zoning regulations.SeeMcKinney v. High Point(N.C.1953) , 74 S.E.2d 440;Puhr v. Kansas City(Kan.1935) , 51 P.2d 911;Water Works Board v. Stephens(Ala.1955) , 78 So.2d 267;Treasure Island v. Decker(Fla. [App.]1965), 174 So.2d 756;Baltis v. Westchester(Ill.1954) , 121 N.E.2d 495;Taber v. Benton Harbor(Mich.1937) , 274 N.W. 324;Wilkinsburg-Penn Joint Water Authority v. Churchill(Pa.1965) , 207 A.2d 905.

The proprietary-governmental function distinction has also been criticized as being irrelevant because the immunity concept was developed only to limit a governmental entity's exposure in tort and has been held to be inapplicable in zoning cases.City of Fargo, Cass County v. Harwood Township(N.D.1977), 256 N.W.2d 694;Seward County Board of Commissioners v. City of Seward(1976), 196 Neb. 266, 242...