Newman v. City of Warsaw

• Decision Date: 30 March 2004
• Docket Number: No. WD 62149.,WD 62149.
• Citation: 129 S.W.3d 474
• Parties: James E. NEWMAN and, Boring's Country Estates, Inc., Appellants, v. CITY OF WARSAW, Missouri, and Lou Ann Breshears, and Ken Brown, and Corbin Cain, and Krysti Woods, and Dick Fry, and Sandra Ward, Respondents, Jay Nixon, Attorney General, Defendant.
• Court: Missouri Court of Appeals

129 S.W.3d 474

James E. NEWMAN and, Boring's Country Estates, Inc., Appellants, v. CITY OF WARSAW, Missouri, and Lou Ann Breshears, and Ken Brown, and Corbin Cain, and Krysti Woods, and Dick Fry, and Sandra Ward, Respondents Jay Nixon, Attorney General, Defendant.

No. WD 62149.

Missouri Court of Appeals, Western District.

March 30, 2004.

Sherwin Epstein, Kansas City, for appellant.

Robert S. Drake, Jr., Warsaw, Kelly Charles Tobin, Randy Paul Scheer, John Gerard Schults, Kansas City, and Steven Andrew Fritz, Sedalia, for respondent.

RONALD R. HOLLIGER, Judge.

James Newman appeals the dismissal of his declaratory judgment action filed against the City of Warsaw and individual members of the City's Board of Aldermen opposing the proposed annexation of certain unincorporated land adjoining the City. We find that the trial court erred by dismissing Newman's suit against the City but affirm the trial court's dismissal of the individual members of the Board of Aldermen from the case. The matter is, therefore, reversed and remanded in part and affirmed in part.

FACTUAL AND PROCEDURAL BACKGROUND

James Newman is a resident of the City of Warsaw, Missouri, challenging the City's proposed annexation of certain property in Benton County, Missouri. The property in question is located north of the City and in the southwestern quadrant of the intersection of Highway 65 and Truman Dam Access Road. One portion of that property (the "Gerken and Scott property") had apparently been considered for development by a national retail chain, but had been rejected because the property did not have full access to the highway and was not served by sewer, water, or other utilities. The Tax Increment Financing Commission of Warsaw, Missouri, proposed a TIF plan to assist with development of the property and prepared a study which stated that the Gerken and Scott property was blighted. The TIF plan could not proceed, however, as the property was not within the Warsaw city limits.

Subsequently, an involuntary annexation process was initiated to annex the Gerken and Scott property, as well as additional land that lay between the Gerken and Scott Property and the city limits.¹ Included in that other land was property owned by appellant Boring's County Estates ("BCE"). A public hearing was held with regard to the annexation, in which BCE and Newman both offered evidence in opposition to the annexation. Despite their objections, the City adopted an ordinance approving the involuntary annexation.

Newman and BCE brought the present declaratory judgment action against the City and individual members of the Board of Aldermen, seeking to block the annexation process on two grounds. First, they argued that the adoption of the annexation ordinance was arbitrary, unreasonable, and void because certain portions of the area to be annexed were found to be blighted. Second, they argued that the annexation ordinance was improper because it relied upon a plan of intent that incorporated funds from a TIF plan that had not been approved.

The City and the individual defendants sought the dismissal of the declaratory judgment action, advancing the argument that the declaratory judgment action brought by BCE and Newman was barred on two grounds. First, the defendants argued that the issues raised by the declaratory judgment action were not ripe for judicial review. Second, they argued that declaratory relief was not available because BCE and Newman had other means of legal relief available to them, specifically intervention in the statutory declaratory judgment action the City was required to file pursuant to Section 71.015.1(5), RSMo 2000.² The trial court granted the defendants' motion to dismiss, leading to the present appeal.

While this appeal was pending, the property owned by BCE was sold to a third party. BCE subsequently dismissed its appeal, leaving Newman as the sole remaining appellant in this matter.

DISCUSSION

When reviewing a trial court's dismissal of a case upon a motion to dismiss, we treat the facts alleged in the petition as true and give that pleading its broadest intendment, construing it in favor of the plaintiff, in order to determine whether the petition invokes "substantive principles of law which entitle the plaintiff to relief." L.C. Dev. Co., v. Lincoln County, 26 S.W.3d 336, 339 (Mo.App.2000) (citing Farm Bureau Town & Country Ins. Co. v. Angoff, 909 S.W.2d 348, 351 (Mo. banc 1995)). With those principles in mind, we will proceed to examine Newman's sole point on appeal and the arguments raised in opposition to his point on appeal.

I. NEWMAN WAS NOT REQUIRED TO RAISE HIS CLAIMS IN THE STATUTORY DECLARATORY JUDGMENT ACTION

Newman's sole point on appeal contends that the trial court erred in dismissing his declaratory judgment action, as his petition pled all necessary elements to state a cause of action and the claims he raised were ripe for determination. In response, the Defendants raise two arguments. First, they contend that Newman's suit is not ripe for review because the statutory involuntary annexation process has not been completed. Second, they argue that Newman is not entitled to declaratory relief because he has other legal relief available to him through the statutory declaratory judgment action that the City is required to file pursuant to Section 71.015.1(5), RSMo. We take up the latter argument first, as its resolution aids in evaluating the defendants' former contention.

As described in Section 71.015.1, RSMo, the involuntary annexation process is essentially composed of five steps. First, a city must determine whether the area to be annexed meets the contiguity and compactness requirements of Section 71.015.1(1), RSMo. Second, the city must propose an ordinance containing the various elements described in subsection (2) of Section 71.015.1, RSMo. Third, the city must provide notice and hold a public hearing on the ordinance regarding the annexation, including the presentation of the "plan of intent" the city intends to follow in providing city services to the area to be annexed. Fourth, the city must file a declaratory judgment action seeking judicial determination of three statutory questions.³ Fifth, an election must be held to approve the annexation. The final two steps may be taken in either order by a City.

Defendants argue that the statutory declaratory judgment action required by Section 71.015.1, RSMo, is the sole vehicle Newman may use to raise his claims and that he is barred from filing an independent declaratory judgment action to address those issues. The City relies upon State ex rel. Director of Revenue v. Pennoyer, 872 S.W.2d 516 (Mo.App.1994), for the proposition that declaratory judgment may not be sought where there is a "specific, and an adequate, statutory procedure" in place for challenging the annexation. See 872 S.W.2d at 518 (citing State ex rel. Dir. of Revenue v. Kinder, 861 S.W.2d 161, 163 (Mo.App.1993)). Newman takes the position that he has no right to intervene in that action.

Section 71.015.1(5)(c), RSMo, requires that the city bring the declaratory judgment action as a class action against the inhabitants of the area to be annexed. If the area to be annexed includes a public road or highway but not all of the land adjoining that thoroughfare, the owners of that adjoining land may intervene in the declaratory judgment action as a matter of right. § 71.015.1(9), RSMo. Newman does not appear to fall within either of these categories. The statute is silent on the question of whether intervention by other interested parties is permissible. There is no suggestion that the action is limited exclusively to the mandatory parties denominated by the statute and those who the statute states may intervene as a matter of right. On the other hand, neither does the statute provide Newman with either a conditional or unconditional right to intervene.

A similar issue was touched upon in both State ex rel. City of Jackson v. Grimm, 555 S.W.2d 643 (Mo.App.1977), and In re Osage Beach, 568 S.W.2d 539 (Mo.App. 1978), each of which addressed the issue of intervention in a statutory declaratory judgment proceeding under Section 71.015. In each case, the intervenors were other municipalities seeking to annex the same unincorporated area. Both cases determined that the intervening municipality was not entitled to intervention as a matter of right. City of Jackson, 555 S.W.2d at 646; Osage Beach, 568 S.W.2d at 541. Instead, intervention was determined to be at the discretion of the court, on a permissive intervention basis. Osage Beach, 568 S.W.2d at 541.

Even if Newman could intervene in the statutory declaratory judgment action, it does not follow that he is limited to intervention and is barred from raising the issue in a separate declaratory judgment action. Osage Beach also states that a party who does not have the status of a necessary party or an intervenor as a matter of right with regard to the statutory declaratory judgment action (in other words, is only a permissive intervenor) can file an independent declaratory judgment action to adjudicate that party's claims. See 568 S.W.2d at 541. The reasoning behind this conclusion is sound. If a trial court has the discretion to bar Newman from intervening in the statutory declaratory judgment action, then that action cannot be the sole means by which parties such as Newman may judicially challenge the annexation. Such parties must be afforded some other opportunity to raise their claims.

We are cognizant that judicial economy would be served by permitting other parties to intervene in the statutory judgment action where, as here, a party seeks to raise allegations closely related to and touching upon the core issues to be decided in the statutory declaratory judgment action, as laid out in Section 71.015.1(5), RSMo. Permitting intervention would help avoid the possibility of a city needing to litigate similar issues multiple times...