Northgate Apartments v. City of North Kansas City

• Decision Date: 27 March 2001
• Parties: (Mo.App. S.D. 2001) Northgate Apartments, L.P., Appellant v. City of North Kansas City, Missouri, Respondent. WD58650 0
• Court: Missouri Court of Appeals

45 S.W.3d 475 (Mo.App. S.D. 2001)

Northgate Apartments, L.P., Appellant v. City of North Kansas City, Missouri, Respondent.

WD58650

Missouri Court of Appeals Western District

03/27/2001

Appeal From: Circuit Court of Clay County, Hon. David W. Russell

Counsel for Appellant: James Robert Schurman

Counsel for Respondent: Samuel Preston Williams

Opinion Summary: Plaintiff-Appellant Northgate Apartments, L.P. sought a declaratory judgment as to the validity and enforceability of a pair of ordinances passed by Defendant-Respondent City of North Kansas City, Missouri. The ordinances designated a 50-acre tract containing apartment properties owned by Northgate as a "Redevelopment Area" and authorized North Kansas City to acquire the entire property by purchase or eminent domain. North Kansas City moved to dismiss Northgate's petition. The court dismissed Northgate's petition, finding that Northgate had failed to exhaust its available remedies at law, and that Northgate's petition did not present a justiciable controversy. Northgate appeals.

REVERSED AND REMANDED.

Division Two holds: Northgate has standing, and its petition presents a justiciable controversy because the ordinances passed by North Kansas City have caused and will continue to cause it to suffer irreparable injury, including loss of tenants, loss of monthly income, diminished value of its property and a cloud on title. Northgate also has no adequate remedy at law, because North Kansas City has yet to file a condemnation action wherein Northgate could attack the validity of the ordinances, and until North Kansas City does so, Northgate continues to suffer the very economic harm that forms the basis of its claim that a justiciable controversy exists; i.e., loss of its tenants and income. This Court therefore reverses the judgment of the lower court dismissing Northgate's petition for declaratory relief, and remands for further proceedings consistent with this opinion.

Laura Denvir Stith, Judge

Plaintiff-Appellant Northgate Apartments, L.P. ("Northgate") filed a petition in the Circuit Court of Clay County seeking a declaratory judgment as to the validity and enforceability of a pair of ordinances passed by Defendant-Respondent City of North Kansas City, Missouri ("North Kansas City"). The ordinances designated a 50-acre tract containing apartment properties owned by Northgate as a "Redevelopment Area," and authorized North Kansas City to acquire the entire property by purchase or eminent domain. North Kansas City moved to dismiss Northgate's petition on several grounds. The Clay County Circuit Court, the Honorable David W. Russell, presiding, dismissed Northgate's petition, finding that Northgate had failed to exhaust its available remedies at law, and that Northgate's petition did not present a justiciable controversy. Northgate appeals. It argues that its petition presents a justiciable controversy because the ordinances passed by North Kansas City have caused and will continue to cause it to suffer irreparable injury, including loss of tenants, loss of monthly income, diminished value of its property and a cloud on title. Northgate also argues that it has no adequate remedy at law, because North Kansas City has yet to file a condemnation action wherein Northgate could attack the validity of the ordinances, and until North Kansas City does so, Northgate continues to suffer the very economic harm that forms the basis of its claim that a justiciable controversy exists; i.e., loss of its tenants and income.

We agree with respect to both of Northgate's contentions on appeal. We therefore reverse the judgment of the lower court dismissing Northgate's petition for declaratory relief, and remand for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff-Appellant Northgate Apartments, L.P. (hereinafter "Northgate") is the owner of Northgate Village Apartments, a large property located in North Kansas City and consisting of more than fifty acres improved with over 600 multifamily apartment units. Defendant-Respondent North Kansas City is a third-class Municipal Corporation located in Clay County, Missouri. On February 1, 2000, pursuant to the Real Property Tax Increment Allocation Redevelopment Act, Section 99.800 et seq. RSMo Cum. Supp. 1998 (hereinafter "the TIF law"), the North Kansas City City Council passed and the Mayor approved Ordinance No. 7178 and Ordinance No. 7179.

Ordinance No. 7178 accepted a recommendation by North Kansas City's Tax Increment Financing Commission to approve the Northgate Village Tax Increment Financing Plan, which designated Northgate's entire apartment property in North Kansas City as a "Redevelopment Area." Ordinance No. 7178 contained a number of findings concerning the apartment property that supported the designation, including that: (a) the apartment property is a conservation area as defined by Section 99.805 RSMo; (b) the apartment property has not been subject to growth and development through investment by private enterprise; (c) the apartment property would not reasonably be anticipated to be developed without the adoption of the redevelopment plan; (c) revitalization of the apartment property is not a financially feasible option and only a complete demolition and reconstruction of the property is financially feasible; and (e) a cost-benefit analysis had been performed which met the requirements of the TIF law. Ordinance No. 7178 also authorized North Kansas City to acquire Northgate's apartment property by purchase or eminent domain in order to achieve the objectives of the redevelopment plan. Ordinance No. 7179 approved a redevelopment agreement between North Kansas City and a private developer to implement the redevelopment plan. Ordinances 7178 and 7179 were passed after public hearings, during which Northgate objected to the passage of the ordinances.

On March 9, 2000, Northgate filed its Petition for Declaratory Judgment and Injunction in the Circuit Court of Clay County, Missouri, challenging the validity of the ordinances pursuant to the Uniform Declaratory Judgment Act, Sec. 527.010 et seq. RSMo 1994. Essentially, the Petition alleged that North Kansas City's findings underlying the designation of its property as a Redevelopment Area were erroneous, arbitrary and capricious, thereby rendering the ordinances invalid under the TIF law. In response to Northgate's petition, North Kansas City filed a motion to dismiss pursuant to Rule 55.27 on the basis that the trial court lacked subject matter jurisdiction, that Northgate failed to state a claim upon which relief can be granted in that the Tax Increment Financing Commission, Hunt Midwest Real Estate, and others were indispensable parties who had not been joined, that there was no justiciable controversy between the parties, and that the matters alleged in Northgate's petition were not ripe for judicial determination.

On May 19, 2000, the trial court granted North Kansas City's motion to dismiss Northgate's petition, finding that Northgate had an adequate remedy at law, and that the petition did not present a justiciable controversy. The trial court expressly declined to address the other grounds alleged by North Kansas City as bases for dismissal.

Northgate's appeal followed.

II. LEGAL ANALYSIS

Northgate appeals from the trial court's grant of North Kansas City's motion to dismiss. "When reviewing the trial court's grant of a motion to dismiss, we look to determine if the facts as pleaded and the reasonable inferences drawn therefrom state any ground for relief." Arnold v. American Family Mut. Ins. Co., 987 S.W.2d 537, 539 (Mo. App. W.D. 1999). "'In assessing the sufficiency of a petition, we accept all properly pleaded facts as true, give them a liberal construction, and draw all reasonable inferences which are fairly deducible from the pleaded facts.'" Id.

Here, Northgate requests declaratory relief. Section 527.010 RSMo 1994, the Declaratory Judgment Act, authorizes a party to seek a declaratory judgment to establish the rights, status, and duties of parties so as to avoid loss and encourage settlement of disputes before litigation. City of St. Louis v. Milentz, 887 S.W.2d 709, 711 (Mo. App. E.D. 1994). It specifically provides that declaratory judgments are a proper vehicle for testing the validity of statutes or ordinances:

Any person . . . whose rights, status or other legal relations are affected by a statute, [or] municipal ordinance . . . may have determined any question of construction or validity arising under the . . . statute, [or] ordinance . . . and obtain a declaration of rights, status or other legal relations thereunder.

Sec. 527.020 RSMo 1994. See also Milentz, 887 S.W.2d at 711, citing, Tietjens v. City of St. Louis, 222 S.W.2d 70, 72 (Mo. banc 1949).

Nonetheless, in order to maintain a declaratory judgment action, a petitioner must satisfy four requirements. First, the petitioner must demonstrate a justiciable controversy exists which presents a real, substantial, presently-existing controversy as to which specific relief is sought, as distinguished from an advisory decree offered upon a purely hypothetical situation. Milentz, 887 S.W.2d at 711. Second, the petitioner must...