Phillips v. City of Whitefish

• Decision Date: 15 July 2014
• Docket Number: No. DA 13–0472.,DA 13–0472.
• Citation: 375 Mont. 456,330 P.3d 442
• Parties: Lyle PHILLIPS, Anne Dee Reno, Turner Askew, and Ben Whitten, Plaintiffs and Appellees, v. CITY OF WHITEFISH, Defendant, Third–Party Plaintiff, and Appellant, and The Board of Commissioners of Flathead County, Defendant, Third–Party Defendant and Appellee, and Dan Weinberg and Ed McGrew, individually and on behalf of Let Whitefish Vote, a ballot committee lawfully organized under the laws of Montana; Mary Person and Marilyn R. Nelson, Intervenors and Appellants.
• Court: Montana Supreme Court

375 Mont. 456

330 P.3d 442

Lyle PHILLIPS, Anne Dee Reno, Turner Askew, and Ben Whitten, Plaintiffs and Appellees,

v. CITY OF WHITEFISH, Defendant, Third–Party Plaintiff, and Appellant,andThe Board of Commissioners of Flathead County, Defendant, Third–Party Defendant and Appellee,andDan Weinberg and Ed McGrew, individually and on behalf of Let Whitefish Vote, a ballot committee lawfully organized under the laws of Montana; Mary Person and Marilyn R. Nelson, Intervenors and Appellants.

No. DA 13–0472.

Supreme Court of Montana.

Argued April 11, 2014.

Submitted April 23, 2014.

Decided July 15, 2014.

For Appellant: Terry N. Trieweiler (argued); Trieweiler Law Firm; Whitefish, Montana (for City of Whitefish), Mary E. VanBuskirk; Whitefish City Attorney; Whitefish, Montana (for City of Whitefish), John F. Lacey (argued); McGarvey, Heberling, Sullivan and McGarvey, P.C.; Kalispell, Montana (for Dan Weinberg, et al.).

For Appellees: Alan F. McCormick (argued); Garlington, Lohn & Robinson, PLLP; Missoula, Montana (for Board of Commissioners), Duncan Scott (argued); Scott & Kienzle, P.A.; Kalispell, Montana (for Lyle Phillips et al.).

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Dan Weinberg, Ed McGrew, Let Whitefish Vote, Mary Person, and Marilyn Nelson (collectively Intervenors), and City of Whitefish (City) appeal from the order of the Eleventh Judicial District Court, Flathead County, granting summary judgment to Lyle Phillips, Anne Dee Reno, Turner Askew, and Ben Whitten (collectively Plaintiffs) and the Board of Commissioners of Flathead County (County). Plaintiffs filed this action after voters in Whitefish passed a referendum repealing Resolution 10–46, which authorized the City to enter into an interlocal agreement with the County concerning planning and zoning authority over a two-mile area surrounding the City, commonly referred to as the extraterritorial area (ETA), or the “donut.” On cross-motions for summary judgment, the District Court held that the Resolution was not subject to the right of voter initiative and referendum. The following issues have been raised on appeal:

¶ 2 1. Did the District Court err by not dismissing the suit as untimely?

¶ 3 2. Did the District Court err by determining that Resolution 10–46 was an administrative act by the City that was not subject to repeal by referendum?

¶ 4 3. If Intervenors are entitled to summary judgment and the referendum is valid, is the 2005 Interlocal Agreement restored?

¶ 5 We affirm the District Court on issues one and two, and do not reach issue three.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 6 A city may adopt a growth policy and implement zoning and subdivision regulation in an area beyond the city limits only if the county has not “adopted zoning or subdivision regulations” in that area. Section 76–2–310(1), MCA. Likewise, a city may enforce its zoning and subdivision regulations in the extended area only “until the county board adopts a growth policy ... and accompanying zoning or subdivision resolutions that include the area.” Section 76–2–311(1), MCA. Thus, by statute, a city's authority to zone and regulate outside its boundaries is limited to instances where the county has not exercised its authority, and only until the county does so.

¶ 7 State law also provides geographical limits for a city's exercise of zoning and subdivision authority outside its boundaries. As a city designated by statute of the second class, according to its population, § 7–1–4111(2), MCA, Whitefish could extend its regulations for up to two miles beyond the city limits, § 76–2–310(1)(b), MCA. State law also allows local governments to create joint planning boards, § 76–1–112(1), MCA, and to enter into interlocal agreements concerning joint provision and maintenance of various services, § 7–11–104, MCA.

¶ 8 The history of this matter begins in 1967, when the City and County jointly created the Whitefish City–County Planning Board (Planning Board). The Planning Board was given planning jurisdiction over the area extending four and one-half miles from city limits, and the City exercised exclusive zoning authority in the area up to one mile beyond city limits, in accordance with then-applicable law and the consent of the County. These jurisdictional areas for planning and zoning were set without a formal interlocal agreement.¹

¶ 9 In 2005, after two years of negotiation, the City and County entered a formal agreement. This 2005 interlocal agreement (2005 IA) reduced the Planning Board's jurisdictional area from four and one-half miles to two miles outside the city limits, while providing for the City's exclusive authority to establish and enforce zoning, subdivision, floodplain, and lakeshore protection regulations, as well as authority to adopt and amend a growth policy, for an area two miles beyond the city limits. By its terms, the 2005 IA could not be altered or terminated without the mutual consent of the parties.

¶ 10 In 2008, the City adopted the Critical Areas Ordinance (CAO), which imposed zoning restrictions in the donut to protect lakes, streams, wetlands, and drainage areas from development. The County opposed the CAO and advised the City that if it was adopted, the County would withdraw from the 2005 IA. Following the adoption of the CAO, the County passed a resolution to withdraw from the 2005 IA. The City filed a lawsuit (2008 lawsuit) that sought to uphold the 2005 IA, and for a declaration that the County could not unilaterally withdraw from the agreement. The County countered that the mutual consent provision for termination in the 2005 IA was unenforceable because it did not address duration as required by the Interlocal Agreement Act, and thereby permanently prevented the County from adopting regulations for the donut as authorized by state law. The County, and intervenors in that case, also argued that the 2005 IA was an unconstitutional delegation of authority from the County to the City, and that interlocal agreements were only allowed for provision of services rather than legislative matters. The District Court denied a preliminary injunction that would have prevented the County from taking any planning or zoning action in the donut during the pendency of the lawsuit, and summarily declared the 2005 IA to be unenforceable. On appeal, this Court reversed that ruling as a premature decision on the merits, entered an injunction, and remanded for trial. City of Whitefish v. Bd. of Co. Commrs. of Flathead Co., 2008 MT 436, ¶¶ 17–18, 347 Mont. 490, 199 P.3d 201.

¶ 11 After remand, the City and County sought an extension of time from the District Court to allow opportunity for settlement discussions. The parties created a joint committee of elected officials and City and County residents (resolution committee) to attempt to resolve the issues by negotiation. Over approximately eight months, the resolution committee held ten public meetings and ultimately proposed amendments to the 2005 IA ² to provide County oversight of the City's exercise of zoning jurisdiction in the donut, allow either party to terminate the IA after giving one year's notice and participating in alternative dispute resolution (ADR), and set a five-year duration term subject to renewal by the parties. As the City and County both had to agree, the proposed changes were further discussed at public meetings of the City Council and County Commissioners. The City formally undertook consideration of the new agreement (2010 IA) by way of Resolution 10–46. On November 15, 2010, the City Council passed Resolution 10–46, which authorized the City Manager to sign the 2010 IA on behalf of the City. At the same meeting, the City Council passed Resolution 10–47, which authorized the City to seek dismissal of the 2008 lawsuit. On November 30, 2010, the County Commissioners adopted a resolution identical to Resolution 10–46 authorizing the County to enter the 2010 IA. As required by the 2010 IA, the City and County filed a joint motion to dismiss the 2008 lawsuit, offering to the District Court that the litigation was moot because the 2010 IA was fully in effect and specifically replaced the 2005 IA. Intervenors in that case opposed dismissal. The District Court dismissed the action on July 11, 2011, reasoning that the 2010 IA had rendered the 2005 IA void and resolved the issues between the parties.

¶ 12 After passage of Resolutions 10–46 and 10–47 by the City Council, citizens who would become Intervenors in this case, and other City residents unhappy with the decision, began collecting signatures to put a referendum on the ballot to repeal Resolution 10–46, which had authorized the City to enter the 2010 IA. The referendum petition was approved as to form and compliance with state law on January 11, 2011. Sufficient signatures were gathered, and on April 24, 2011, the County Election Department certified the ballot measure for the November election. The Referendum explained that the 2010 IA permitted termination by either party without cause, but did not reference Resolution 10–47 or the dismissal of the 2008 lawsuit. In light of the development of this challenge to the 2010 IA and the likelihood of further legal disputes, the County passed a resolution on June 22, 2011, giving notice to the City that it was withdrawing from the 2010 IA.

¶ 13 The Referendum seeking repeal of Resolution 10–46 was placed on the ballot and voted on by City residents. Citizens residing in the donut were not permitted to vote on the Referendum. The Referendum passed by a two-to-one margin in the November 2011 election. Following the election, the City deemed the 2010 IA as rescinded and no longer in effect. The City further took the position that after the 2010 IA was revoked, the 2005 IA was reinstated in its entirety, and the City was authorized once again to exercise exclusive jurisdiction in the donut.

¶ 14 The present lawsuit challenging the validity of the Referendum was filed by Plaintiffs...