Serenko v. City of Wilton

• Decision Date: 19 May 1999
• Docket Number: No. 980206,980206
• Citation: 593 N.W.2d 368
• Parties: Douglas A. SERENKO and Shirley A. Serenko; Frances Bartole Estate and John M. Gregoryk Heirs; and Denis Hedstrom and Hedstrom Truck Line, Inc., Plaintiffs, Appellees, and Cross-Appellants, v. The CITY OF WILTON, Defendant, Appellant and Cross-Appellee.
• Court: North Dakota Supreme Court

Page 368

593 N.W.2d 368

1999 ND 88

Douglas A. SERENKO and Shirley A. Serenko; Frances Bartole Estate and John M. Gregoryk Heirs; and Denis Hedstrom and Hedstrom Truck Line, Inc. Plaintiffs, Appellees, and Cross-Appellants, v. The CITY OF WILTON, Defendant, Appellant and Cross-Appellee.

No. 980206.

Supreme Court of North Dakota.

May 19, 1999.

Charles R. Isakson, Chapman & Chapman, Bismarck, ND, for plaintiffs, appellees, and cross-appellants.

David A. Lindell (argued) and William F. Lindell (appearance), Lindell Law Office, Washburn, ND, for defendant, appellant and cross-appellee.

NEUMANN, Justice.

¶1 The City of Wilton appeals from a judgment invalidating special assessments against two parcels of land, one owned by the estate of Frances Bartole and the heirs of John M. Gregoryk and one owned by Denis Hedstrom and Hedstrom Truck Line, Inc. (collectively "the landowners"). The landowners and Douglas and Shirley Serenko cross-appeal from the judgment. We conclude the City's failure to publish a complete map of the special assessment district did not violate the due process rights of the landowners, and any action by the landowners to invalidate the assessments for failure to follow statutory procedural requirements was barred by N.D.C.C. § 40-22-43. We further conclude the district court did not err in deciding the assessments were not arbitrary, capricious, or unreasonable. We therefore reverse the judgment invalidating the assessments.

I

¶2 On December 4, 1996, the Wilton City Commission adopted a resolution of necessity creating a street improvement district. Four separate areas of the city were included, designated as Areas A, B, C, and D. The complete resolution of necessity, including a map of the improvement district, was published in the official newspaper on December 12, 1996.

¶3 After receiving protests from a significant number of residents in Areas B, C, and D, the City Commission on February 5, 1997, decided to abandon plans to improve those areas, but to continue with the plans for Area A. Subsequently, the City realized the resolution of necessity had been published only once, not twice as required by N.D.C.C. § 40-22-15. On June 5 and 12, 1997, the resolution of necessity was again published. Through no fault of the City, however, the required map accompanying the resolution was not printed in its entirety. The map was cut off at Seventh Street, and did not show properties located west of Seventh Street which were included in Area A of the improvement district.

¶4 The landowners own parcels west of Seventh Street which are included in Area A of the improvement district. Their parcels were shown on the map published in December 1996, but not on the map published in June 1997. Their property was, however, included in the written description of the property published in June 1997. The Serenkos own property east of Seventh Street which is in Area A of the improvement district. The Serenkos' property was shown in all of the published maps.

¶5 Unaware that the map had not been published in its entirety, the City proceeded with the assessment process and appointed a special assessment commission. The City learned of the incomplete publication only after the special assessment list was published in September 1997. The landowners and Serenkos objected to their assessments, and some adjustments were made to the amount of the assessments.

¶6 The landowners and Serenkos brought this action, alleging that the City had failed to comply with the notice requirements of N.D.C.C. § 40-22-15, thereby violating their right to due process, and that the City had acted arbitrarily because the assessments exceeded any actual benefits to their property. After a bench trial, the district court found the City's assessment method was not arbitrary. The court also concluded the City's failure to fully comply with the notice requirements of N.D.C.C. § 40-22-15 by failing to publish a complete map violated the due process rights of the landowners. The court therefore invalidated the assessments against the landowners' property west of Seventh Street. Finding the Serenkos had notice their property was included in the improvement district, the court upheld the assessment against their property.

¶7 The City appealed, asserting the court erred in invalidating the assessments against the landowners. The landowners and Serenkos cross-appealed, asserting the court erred in finding the City's method of determining the assessments was not arbitrary, oppressive, or unreasonable.

II

¶8 Section 40-22-15, N.D.C.C., requires that a resolution of necessity creating a street improvement district must include a map of the improvement district and must be published twice in the official newspaper:

Resolution declaring improvements necessary--Exception for sewer and water improvements--Contents of resolution--Publication of resolution. After the engineer's report required by section 40-22-10 has been filed and approved, the governing body of the municipality, by resolution, shall declare that it is necessary to make the improvements described therein. A resolution shall not be required, however, if the improvement constitutes a water or sewer improvement as described in subsection 1 of section 40-22-01, nor if the governing body determines by resolution that a written petition for the improvement, signed by the owners of a majority of the area of the property included within the district, has been received. The resolution shall refer intelligibly to the engineer's report, and shall include a map of the municipality showing the proposed improvement districts. The resolution shall then be published once each week for two consecutive weeks in the official newspaper of the municipality.

¶9 The City concedes it failed to fully comply with the statute: the first notice, which contained the full map, was only published once; the second notice, although published twice, failed to include a complete map. The City asserts, however, that its failure to fully comply with the statute is not a constitutional due process violation, and therefore the landowners' action is barred by N.D.C.C. § 40-22-43.

¶10 Section 40-22-43 creates a statute of repose for actions based upon defects in the proceedings under N.D.C.C. ch. 40-22, which governs the creation of improvement districts ¹:

Defects and irregularities in improvement proceedings are not fatal. Defects and irregularities in any proceedings had or to be had under this chapter relating to municipal improvements by the special assessment method, where the proceedings are for a lawful purpose and are unaffected by fraud and do not violate any constitutional limitation or restriction, shall not invalidate such proceedings, and no action shall be commenced or maintained and no defense or counterclaim in any action shall be recognized in the courts of this state founded on any such defects or irregularities in such proceedings, unless commenced within thirty days of the adoption of the resolution of the governing board awarding the sale of warrants to finance the improvement.

¶11 The landowners did not commence this action within thirty days of the adoption of the resolution awarding the sale of warrants. Therefore, the dispositive issue on appeal is whether the City's failure to fully comply with the notice requirements set out in N.D.C.C. § 40-22-15 "violate[d] any constitutional limitation or restriction." If not, this action is barred by N.D.C.C. § 40-22-43.

¶12 The trial court concluded the failure to follow N.D.C.C. § 40-22-15 violated the constitutional due process rights of the landowners, and their action was therefore not barred by N.D.C.C. § 40-22-43. Resolution of this issue requires a brief review of the special assessment process for street improvements under N.D.C.C. chs. 40-22 and 40-23. Upon determining street improvements are necessary in a particular area, the City creates an improvement district setting the boundaries of the project. N.D.C.C. §§ 40-22-08 and 40-22-09. The City then passes a resolution of necessity, which must be published in accordance with N.D.C.C. § 40-22-15. The project may not proceed if the owners of a majority of the property in the improvement district file written protests within thirty days. N.D.C.C. §§ 40-22-17 and 40-22-18. If less than a majority of landowners file protests, the City may secure bids on the project and let the contract. See N.D.C.C. §§ 40-22-18 to 40-22-36. The City's special assessment commission then sets the assessments on individual properties within the improvement district, and publishes the assessment list and notice of hearing of objections. See N.D.C.C. §§ 40-23-07 to 40-23-10. Aggrieved parties are afforded a hearing before the special assessment commission to challenge their assessments, and may appeal to the City's governing body. See N.D.C.C. §§ 40-23-11, 40-23-16.

¶13 This statutory scheme essentially creates two separate processes. Chapter 40-22 governs creation of the assessment district and bidding of the project. Chapter 40-23 governs the individualized assessment of specific properties within the district. The landowners concede that, in the second part of the process, they received notice and a full opportunity to be heard before assessments against their property were finalized. They availed themselves of the opportunity to challenge the assessments before the special assessment commission and the city commission, and some of their assessments were in fact reduced in that process. The landowners, however, claim they additionally had a separate constitutional right to notice, including a complete map, at the initial, resolution-of-necessity stage of the proceedings.

¶14 There is no constitutional right to notice when a municipality initially decides to construct an improvement. In Utley v. City of St. Petersburg, 292 U.S. 106, 109, 54 S.Ct. 593, 78 L.Ed. 1155 (1934), the United States Supreme Court held:...