Pruss v. Cedar Rapids/Hiawatha, 03-1091.

• Decision Date: 15 September 2004
• Docket Number: No. 03-1091.,03-1091.
• Parties: Francis J. PRUSS and City of Cedar Rapids, Appellants, v. CEDAR RAPIDS/HIAWATHA ANNEXATION SPECIAL LOCAL COMMITTEE, City Development Board, and City of Hiawatha, Iowa, Appellees.
• Court: Iowa Supreme Court

687 N.W.2d 275

Francis J. PRUSS and City of Cedar Rapids, Appellants, v. CEDAR RAPIDS/HIAWATHA ANNEXATION SPECIAL LOCAL COMMITTEE, City Development Board, and City of Hiawatha, Iowa, Appellees.

No. 03-1091.

Supreme Court of Iowa.

September 15, 2004.

Francis J. Pruss, Cedar Rapids, pro se.

David F. McGuire, City Attorney, Cedar Rapids, for appellant City.

Thomas J. Miller, Attorney General, and Christie J. Scase, Assistant Attorney General, for appellees City Development Board and Special Local Committee.

James P. Craig, Randal J. Scholer, and Brenda K. Wallrichs of Moyer & Bergman, P.L.C., Cedar Rapids, for appellee City of Hiawatha.

STREIT, Justice.

A landowner, drawn to the charm of the bright lights and sewer services of Cedar Rapids, resists the annexing embrace of Hiawatha. A special committee of the City Development Board approved the City of Hiawatha's petition to involuntarily annex Francis Pruss's land, and denied a similar request by Cedar Rapids. Pruss and Cedar Rapids complain the Committee's interpretation of a state annexation law was wrong, because their request was not afforded the "presumption of validity" expressly granted to voluntary annexations. They also argue Cedar Rapids, and not Hiawatha, could better serve the Pruss property. Because we find the Committee acted legally and its decision was supported by substantial evidence, we affirm.

I. Facts and Prior Proceedings

The events and legal proceedings which gave rise to this appeal span nearly eight years and include two prior appeals to this court. City of Hiawatha v. City Dev. Bd., 609 N.W.2d 496 (Iowa 2000) (Hiawatha I); City of Hiawatha v. City Dev. Bd., 609 N.W.2d 532 (Iowa 2000) (Hiawatha II). In the interest of judicial economy, we repeat only the most salient details.

In late 1996 and early 1997, a jurisdictional battle royal erupted among three Linn County municipalities after the City of Hiawatha attempted to involuntarily annex over 1600 acres of unincorporated land in Linn County. See Iowa Code § 368.11 (2001). The City Development Board contemporaneously received a flurry of applications for voluntary annexation to Cedar Rapids, Robins, and Hiawatha. See id. §§ 368.7, 368.9. In one of those applications, Francis Pruss requested annexation of his property to Cedar Rapids. The Board determined the Hiawatha petition contained common territory with several of the voluntary annexation requests, including the Pruss-Cedar Rapids application. As a consequence, the Board tabled Hiawatha's petition for involuntary annexation while it decided these pending voluntary annexation proposals. See id. § 368.7(4) (upon receiving competing voluntary and involuntary annexation requests, the Board "shall approve the application for voluntary annexation, if the application meets the applicable requirements of [chapter 368]," unless certain exceptions apply); see also id. § 368.6 (establishing a presumption of validity for voluntary annexations).

The Board denied Pruss's application for voluntary annexation to Cedar Rapids because it would have created an "island" of unincorporated land surrounded by Cedar Rapids, Hiawatha, and Robins. See id. § 368.7(3) ("The board shall not approve an application which creates an island."); see also id. § 368.1(10) (defining an island as "land which is not part of a city and which is completely surrounded by the corporate boundaries of one or more cities"). The Board notified the parties, however, that the Pruss application could be "converted" into an involuntary petition. See id. § 368.7(4) ("If an application for voluntary annexation is not approved pursuant to this section, the board shall cause the conversion of the application to a petition... and shall proceed under section 368.14A."). A special local committee would then consider this converted involuntary petition with the competing Hiawatha involuntary petition. Id. § 368.14A (providing for appointment of special local committee where two or more pending requests for involuntary annexation concern a common territory). With some modifications the Board approved the other pending voluntary annexation requests.

Hiawatha sought judicial review and in two separate appeals challenged the Board's approval of these other voluntary annexations of land to Cedar Rapids and Robins. The Board postponed action on Hiawatha's petition for involuntary annexation of the Pruss property while these appeals were pending; Hiawatha's petition had territory in common with the challenged annexations. We ultimately affirmed. See Hiawatha I, 609 N.W.2d at 497 (voluntary annexation of nearly 1000 acres to Cedar Rapids); see also Hiawatha II, 609 N.W.2d at 534 (smaller voluntary annexation to Robins).

After Hiawatha I and Hiawatha II were decided, the Board notified Cedar Rapids it would resume consideration of Hiawatha's involuntary petition for annexation at an upcoming hearing, at which Cedar Rapids would have the opportunity to discuss a "converted" Pruss application. Cedar Rapids subsequently passed a resolution requesting the Board convert Pruss's denied application for voluntary annexation into an involuntary annexation, which the City would bring.

In February 2001, the Board ordered the formation of a special local committee to consider the competing Hiawatha and Cedar Rapids petitions for involuntary annexation of the Pruss property. See Iowa Code § 368.14A. Later that same year, the Cedar Rapids/Hiawatha Annexation Special Local Committee voted to approve the Hiawatha petition and dismiss the Cedar Rapids petition. The Committee found Hiawatha had the ability to provide appropriate levels of new municipal services and benefits to the Pruss property. An election was held, and the annexation was approved by a majority of voters. See id. § 368.19.

Pruss filed a petition for judicial review of the Committee's decision to annex his property to Hiawatha. Cedar Rapids joined the petition, and Hiawatha intervened on behalf of the Committee. The district court affirmed.

Pruss and Cedar Rapids appealed. Their arguments, which are for the most part the same as those raised in the district court, boil down to four claims: namely, they contend the Committee (1) failed to grant the Cedar Rapids annexation request a presumption of validity; (2) wrongly concluded Hiawatha could provide substantial municipal services and benefits not previously enjoyed by the annexed territory; (3) did not give adequate notice of a pre-hearing conference; and (4) improperly ordered the election before filing its written decision.¹

Additional facts will be set forth below as needed.

II. Standard and Scope of Review

Iowa's city development statute specifically limits judicial review of a committee decision. It states:

The judicial review provisions of this section and chapter 17A shall be the exclusive means by which a person or party who is aggrieved or adversely affected by agency action may seek judicial review of that agency action. The court's review on appeal of a decision is limited to questions relating to jurisdiction, regularity of proceedings, and whether the decision appealed from is arbitrary, unreasonable, or without substantial supporting evidence. The court may reverse and remand a decision of the board or a committee, with appropriate directions.

Iowa Code § 368.22. Iowa Code chapter 17A, the Iowa Administrative Procedure Act, generally limits review, with certain enumerated exceptions we need not discuss here. See id. §§ 17A.19-.20; Citizens of Rising Sun v. Rising Sun City Dev. Comm., 528 N.W.2d 597, 599 (Iowa 1995) (explaining interplay between specific limitations of the review provisions of the city development statute and the general limitations of a previous version of the Iowa Administrative Procedure Act). See generally Mycogen Seeds v. Sands, 686 N.W.2d 457, 464-465 (Iowa 2004)

(explaining general provisions of current Iowa Administrative Procedure Act). On appeal, we decide whether the district court correctly applied the law. See Mycogen, 686 N.W.2d at 465; Dickinson County v. City Dev. Comm., 521 N.W.2d 466, 468 (Iowa 1994). If our conclusions are the same as those the district court reached, we affirm; if not, reversal may be required. See Mycogen, 686 N.W.2d at 464; Dickinson County, 521 N.W.2d at 468.

The law of annexation is purely statutory. See Citizens of Rising Sun, 528 N.W.2d at 599

. The legislature prescribes the conditions of, and procedures for, annexation. See id. Nonetheless, "a failure to literally comply with every word of our annexation statutes is not fatal." City of Des Moines v. City Dev. Bd., 473 N.W.2d 197, 200 (Iowa 1991). "Substantial compliance ... is sufficient, and legislation establishing the method by which municipal corporate boundaries may be extended is to be liberally construed in favor of the public." Id.

III. The Merits

A. Conversion and Presumption of Validity

The most contentious and complicated issue in this case is a thorny matter of statutory interpretation: namely, is Cedar Rapids' request to annex the Pruss property entitled to a presumption of validity because it was "converted" from Pruss's denied application for voluntary annexation? This question involves the juxtaposition of two sections of Iowa's city development statute, which taken together involve three discrete legal principles. Iowa Code section 368.6 establishes (1) a presumption of validity for applications for voluntary annexation; section 368.7 provides (2) a denied voluntary annexation request shall be "converted" into an involuntary annexation petition, but (3) this transformation shall not prejudice the status of the applicant. Pruss argues a converted petition is still entitled to a presumption of validity, because if the presumption of validity did not survive the conversion, so to speak, he would be prejudiced. The Committee, in line with the district court, takes a narrower view.

Because of the complexity of the statute, we think...