Schanz v. City of Billings, 14458

• Court: United States State Supreme Court of Montana
• Citation: 182 Mont. 328,597 P.2d 67
• Docket Number: No. 14458,14458
• Parties: Arthur SCHANZ et al., Plaintiffs and Appellants, v. CITY OF BILLINGS et al., Defendants and Respondents.
• Decision Date: 27 June 1979

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597 P.2d 67 182 Mont. 328 Arthur SCHANZ et al., Plaintiffs and Appellants,
v.
CITY OF BILLINGS et al., Defendants and Respondents. No. 14458. Supreme Court of Montana. Submitted March 16, 1979.
Decided June 27, 1979.

[182 Mont. 329]

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Fillner & Pitet, Billings, Russell K. Fillner (argued), Billings, for plaintiffs and appellants.

Peterson & Hunt, Billings, K. D. Peterson (argued), Billings, for defendants and respondents.

SHEEHY, Justice.

Plaintiffs Arthur and Rachel Schanz appeal from the judgment of the District Court, Yellowstone County, which dismissed their claim that annexation by the defendants City of Billings, et al., of certain property known as the Hayes Subdivision was ineffective, dismissed their claim that the Hayes Subdivision should not have been zoned R-7200 when it was annexed, and ordered that plaintiffs' application for a zone change be heard and reconsidered in accordance with criteria set forth in this Court's decision in Lowe v. City of Missoula (1974), 165 Mont. 38, 525 P.2d 551.

Arthur Schanz has been in the construction business since 1953. In December 1971, Schanz purchased real property known as the [182 Mont. 330] Hayes Subdivision, comprised of twenty lots situated outside of, but contiguous to, the city limits of Billings, Montana. During construction of a four-plex apartment on the land, which began in June 1972, Schanz discovered that the City's water and sewer services would not be extended to the subdivision unless the property was annexed.

Schanz took no action on the matter for approximately one year, but in the meantime enlisted the services of a registered engineer, made arrangements with a contractor to install water and sewer lines, and continued with his construction work in the subdivision.

On July 5, 1973, the registered engineer, acting in Schanz's behalf, applied to the City for permission to extend water and sewer lines to the Hayes Subdivision. The Public Utilities Board approved the application, and on July 16, the City Council approved the requested extensions "subject to annexation".

A request to extend city boundaries to include the Hayes Subdivision appeared on the City Council agenda on August 6, 1973, and the resolution of intent to extend the boundaries of the City of Billings was adopted the same day. Notice of the resolution was published and the matter came before the City Council for final action on September 10, 1973, resulting in an expansion of the City's boundaries to include the Hayes Subdivision.

The City Zoning Commission sent its recommended zoning classification to the City Council on September 10, the same day the resolution was passed to extend the City's boundaries. A notice of public hearing fixing October 1, 1973, as the date of hearing before the City Council was posted September 13, 1973, by the City clerk. No one appeared to speak in favor of or against the Commission's recommendation and the City Council adopted the recommendation by passage of Ordiance No. 3744 on October 1. The land on which the four-plex had been built was classified R-6000 (multi-family dwellings) and the remainder was given a R-7200 classification (single family dwellings and duplexes only).

Schanz did not attend any of the proceedings affecting the property. However, he did continue his construction activities, and by [182 Mont. 331] October 1973, Schanz had built or had under construction two four-plexes and three single family dwellings. When Schanz applied to the City for more building permits and was refused because of the R-7200 zoning classification, he began what was to be a continuous series of efforts to be exempted from zoning regulations.

On or before February 11, 1974, Schanz applied for a zone change to allow for construction of more four-plexes. Persons living adjacent to the subdivision filed a protest (the subdivision is surrounded by a

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R-9600 classification-single family dwellings only). After failing to secure a zone change, Schanz applied for a variance. The variance was denied, and on March 3, 1975, Schanz again petitioned for a zone change. The City Council denied the zone change on April 28, 1975, reconsidered the application and denied it again on May 19, 1975. The procedure was repeated with the same result in June 1976.

This action was filed in District Court, Yellowstone County, on September 3, 1976, to have the annexation resolution declared null and void, to have the zoning classification removed, or alternatively, to secure a zone change. On July 24, 1978, the Honorable Charles Luedke entered judgment dismissing the first and second claims and ordering that the application for a zone change be reconsidered in accordance with the criteria set forth in Lowe.

On appeal, plaintiffs present three issues:

1. Can an initial zone classification be made when the notice and hearing on the matter by the City Zoning Commission and City Council came before the affected area was annexed by the City?

2. Can an initial zone classification be made when the City Zoning Commission and City Council failed to comply with the twelve-point test set forth in section 11-2703, R.C.M.1947, now section 76-2-304 MCA, and this Court's decision in Lowe?

3. Are plaintiffs estopped from asserting that the procedure for annexing the land was fatally defective, rendering the annexation void?

[182 Mont. 332] The Zoning Commission for the City of Billings held a hearing on September 10, 1973, to consider the zoning recommendation to be sent to the Billings City Council for the Hayes Subdivision. Notice of the hearing had been published August 16, 1973. Following the hearing, the Commission decided on a recommendation and sent it to the City Council. The recommendation reached the City Council approximately five (5) hours before the resolution annexing the Hayes Subdivision was passed. Plaintiffs contend this procedure violated section 7.03 of the Billings Zoning Ordinance, and Article II, Section 8 of the 1972 Montana Constitution. Section 7.03 of...