Snodgrass v. City of Wichita

• Decision Date: 01 April 2022
• Docket Number: 123,486
• Parties: David L. Snodgrass and Leslie J. Snodgrass, Appellants, v. City of Wichita, Kansas, Appellee.
• Court: Kansas Court of Appeals

David L. Snodgrass and Leslie J. Snodgrass, Appellants,
v.
City of Wichita, Kansas, Appellee.

No. 123, 486

Court of Appeals of Kansas

April 1, 2022

NOT DESIGNATED FOR PUBLICATION

Appeal from Sedgwick District Court; Deborah Hernandez Mitchell, judge.

Austin K. Parker, of Parker & Parker LLC, of Wichita, for appellants.

Brian K. McLeod, deputy city attorney, for appellee.

Before Atcheson, P.J., Hill and Gardner, JJ.

MEMORANDUM OPINION

PER CURIAM

After accepting a developer's petition to finance street, sewer, and water improvements for a housing development under K.S.A. 12-6a01 et seq., the City of Wichita levied special assessments against David L. and Leslie J. Snodgrass (Appellants), and other property owners in 2004. The City issued bonds to pay for the improvements, then in 2011 issued refunding bonds to benefit from lower interest rates. But the City did not refund to property owners any of the money it saved by doing so. Appellants sued the City and individually named defendants asserting an entitlement to money based on the

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difference between the interest rate on the original bonds in 2004 and the interest rate of refunding bonds issued in 2011.

Appellants then moved for partial summary judgment, arguing the City's failure to pass on its savings constituted a "'taking, under the guise of taxation.'" The City cross-moved for summary judgment. The district court granted summary judgment for the City, finding that the assessment was voluntary, that the alleged injury was too small to sustain a takings claim, and that the action was barred by a 30-day statute of limitations. The court dismissed Appellants' remaining claims, including those against the individually named defendants. On review, we find the district court properly dismissed Appellants' claims as untimely and properly granted summary judgment for the City.

Factual and Procedural Background

Ronald E. Peake petitioned the City of Wichita under K.S.A. 12-6a01 et seq. to finance street, sewer, and water improvements for a housing development-the Remington Place addition-on several lots of land he owned. The City agreed and issued general obligation bonds to fund the improvements. After publishing notice and holding a public hearing on the matter, the City levied special assessments against individual property owners within the addition to pay for the improvement bonds based on the estimated benefit incurred by each lot. Appellants bought one of Peake's lots in 2003 and started paying annual taxes for the improvements in 2004. They made their final payment in 2019.

Beginning in 2009, the City refinanced several general and special obligation bonds, including the bonds issued for the Remington Place addition, by issuing refunding bonds. In September 2011, the City issued refund bond series 2011C and 2011D-which refunded some but not all the interest maturities accrued in the relevant bond series (778 and 780). The City published notice of the refunding bonds in a newspaper on August 19,

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2011, by providing a copy of the ordinances authorizing the issuance of the refunding bonds, Ordinances 49-068 and 49-069. But the ordinances did not describe the purpose of the bonds or state which of the City's projects the bonds applied to.

The refunding bonds allowed the City to benefit from lower interest rates and thus saved interest costs. The exact amount saved that is attributed to the Remington Place improvements or to Appellants is unclear. But the record shows that the City saved around $60.2 million by issuing more than 30 series of refunding bonds between 2009 and 2017. Appellants estimated to the district court that the City saved $8 million for the Remington Place bonds, but they admit that the amount attributable to individual properties within the Remington Place addition is around $300.

In 2018, Appellants sued the City and individual defendants. The district court dismissed Appellants' claims against some of the named defendants in April 2019. And in May 2019, the district court dismissed the remaining portion of the Appellants' petition based on a failure to prosecute their claims. But the district court later set aside its dismissal and reinstated Appellants' claims.

Appellants then moved for class certification. But shortly after doing so, they agreed to continue the matter. Appellants later filed a motion for partial summary judgment and agreed that the district court could defer ruling on the class certification issues.

Appellants' motion for partial summary judgment argued the City needed to refund to property owners the amount saved by the refunding bonds, citing Village of Norwood v. Baker, 172 U.S. 269, 279, 19 S.Ct. 187, 43 L.Ed. 443 (1898). Appellants also argued the City committed fraud which prevented them from learning of the refunding bonds, thus tolling the time to file a claim under the applicable statute of limitations, citing Friends University v. W.R. Grace & Co., 227 Kan. 559, 564, 608 P.2d 936 (1980).

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The City responded and moved for summary judgment, arguing that it was not legally required to reduce any assessments after issuing the refunding bonds. The City also asked the district court to dismiss Appellants' motion based on the statute of limitations, lack of notice, and immunity. The district court held a hearing and allowed extensive arguments from both sides.

After considering the parties' arguments and written motions, the district court dismissed Appellants' state claims and claims against the individual defendants, and found their claims were barred by a 30-day statute of limitations. It also granted the City's motion for summary judgment on the remaining issues. The district court found no taking because the special assessments were "voluntary" and because Appellants failed to establish the City had taken a "substantial excess" or caused "palpable injustice," distinguishing this case from Norwood.

Appellants timely appeal. They do not challenge the district court's dismissal of their claims against the individual defendants but challenge its rulings about the City.

Appellants' Claims Are Barred by the Statute of Limitations.

The district court dismissed Appellants' claims about the City's refinancing of the assessments as time barred under K.S.A. 12-6a11's 30-day limit.

We apply a de novo standard when reviewing this issue. See State v. Delacruz, 307 Kan. 523, 529, 411 P.3d 1207 (2018) (statutory interpretation); Garcia v. Ball, 303 Kan. 560, 571, 363 P.3d 399 (2015) (question of law about statute of limitations); Martin v. Naik, 297 Kan. 241, 246, 300 P.3d 625 (2013) (summary judgment based on undisputed facts); Wachter Management Co. v. Dexter & Chaney, Inc., 282 Kan. 365, 368, 144 P.3d 747 (2006) (motion to dismiss).

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The 30-day Statute of Limitations

K.S.A. 12-6a11 provides: "No suit to set aside the said assessments or otherwise question the validity of the proceedings shall be brought after the expiration of thirty (30) days from the publication of the ordinance fixing said assessments."

This short time frame for challenging the validity of assessment proceedings enjoys a long history.

"The Legislature has provided that interested parties cannot attack the sufficiency and validity of any proceeding in making an assessment after the expiration of the 30-day limitation. This limitation applies whether the defect is a slight irregularity, a lack of sufficient signers to the petition or because of fraud in obtaining them. In any such case the action to set aside the assessment, to be effectual, must be brought within 30 days after the assessment is ascertained and fixed." Rockwell v. Junction City, 93 Kan. 1, 3, 142 P. 268 (1914).

See City of Topeka v. Gage, 44 Kan. 87, 89, 24 P. 82 (1890) (finding a prior 30-day statute "may be a harsh rule, but that fact does not furnish a reason why we should not construe the statute as it is, though it may furnish a reason why the legislature should modify it."); Wahlgren v. City of Kansas City, 42 Kan. 243, 246, 21 P. 1068 (1889) (rejecting claim that 30 days is an unconstitutionally short statute of limitations).

In Schenk v. Kansas City, 134 Kan. 181, 184, 5 P.2d 842 (1931), the court explained the legislative intent for short limitations in a similar statute which read: "'No suit to set aside the said assessments shall be brought after the expiration of thirty days from the publication of the ordinance fixing said assessments.' Rev. St. 12-608."

"This limitation governing the time in which actions may be brought to question the validity of tax levies and assessments to pay for public improvements has often been

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applied. (Rockwell v. Junction City, 92 Kan. 513, 141 P. 299; Id., 93 Kan. 1, 142 P. 268; Atchison, T. & S. F. R. Co. v. City of Chanute, 95 Kan. 161, 147 P. 836.) In Park Association v. City of Hutchinson, 102 Kan. 488, 171 Pac. 2, where a similar limitation was considered, it was said: 'The intention of the Legislature was that public improvements should not be long delayed by contests of this character nor the assessment proceedings interrupted by belated litigation; and so property owners who propose to challenge an assessment for any kind of defect are required to do so promptly or not at all.'

. . . .

"Moreover, if there was no statute of limitations to bar plaintiffs' action it would be demurrable for laches and want of equity. The idea that taxpayers may sit idly by while public improvements are made and while the city incurs obligations to pay for them, and then after the lapse of years institute proceedings challenging the validity of such city's obligations, and the assessments and levies made to meet them, does not address itself favorably to a court of equity. Time and again this court has said that belated proceedings seeking to defeat payment for public improvements are not looked upon with

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