Soo Line R. Co. v. City of Wilton

Decision Date03 November 1969
Docket NumberNo. 8547,8547
Citation172 N.W.2d 74
PartiesSOO LINE RAILROAD COMPANY, Plaintiff and Respondent, v. CITY OF WILTON, and Otto Vetter as Auditor of McLean County, North Dakota, Defendants and Appellants. Civ.
CourtNorth Dakota Supreme Court

Syllabus by the Court

1. Any aggrieved person may appeal from the determination of a special assessment commission and this right of appeal is not conditioned upon an appearance before the special assessment commission. §§ 40--23--14 and 40--23--15, N.D.C.C.

2. When the city governing body established a local improvement district for street, curb, and gutter which included all abutting property and has directed an assessment according to frontage, the presumption is that all abutting property within such district is benefited by the improvement without regard to the use to which it may be applied.

3. Abutting property cannot be relieved from the burden of a street, curb, and gutter assessment simply because its owner has seen fit to devote it to a use which may not be specially benefited by the local improvement. The benefit is presumed to inure, not to such present use, but to the property itself, affecting its value.

4. The burden is upon the railroad to show it is not benefited and it cannot defeat an assessment for improvements for street, curb, and gutter upon the portion of its right of way which is included in the assessment district by producing evidence of before-and-after value intended to prove that it has not been benefited by the improvements.

5. For reasons stated in the opinion, the assessment of benefits made by the special assessment commission and confirmed by the city commission for street, curb, and gutter improvements which involve judgment and discretion will not be reviewed by the court, and it is not the province of the court to substitute its judgment for that of the commission making such decision, but merely to determine whether the commission was within its jurisdiction, was not mistaken as to the applicable law, and did not act arbitrarily, oppressively, or unreasonably, and to determine whether there is substantial evidence to support or justify the determination.

Zuger, Bucklin, Kelsch & Zuger, Bismarck, for defendants and appellants.

Pearce, Engebretson, Anderson & Schmidt, Bismarck, for plaintiff and respondent.

PAULSON, Judge.

This is an appeal from a judgment entered for the Soo Line Railroad Company (hereinafter Railroad) by the District Court of McLean County, Clifford Jansonius, J., presiding. The City of Wilton (hereinafter City) has demanded a trial de novo in this court, pursuant to § 28--27--32 of the North Dakota Century Code.

The facts are as follows: The governing body of the City of Wilton determined that a number of its streets should be paved and should have curbs and gutters installed. To facilitate this improvement, the city governing board created Street Improvement District 65--2 and resolved that the improvements were necessary and made the proper publication. Mr. Vernon K. Boe, the Railroad's tax commissioner, filed a written protest in its behalf, dated July 12, 1965. A resolution was adopted on August 2, 1965, under the provisions of § 40--22--18, N.D.C.C., finding the protest insufficient. Plans and specifications were drawn and contracts were entered into for a total cost of $425,901.59. The Wilton city auditor, on December 19, 1966, certified the total cost of the project to the Wilton special assessment commission, with the direction that the commission spread assessments to pay the cost. The assessment commission viewed the properties within the improvement district and compiled an assessment list. A hearing for those objecting to the assessment list was scheduled for January 19, 1967, after which some changes were made in assessments and the assessment list was then confirmed on January 23, 1967. The parties stipulated that the Wilton city auditor had stated he would notify the Railroad when the hearing was to be held, but he failed to do so. The Railroad did not appear at the January 19, 1967, hearing before the assessment commission. The city governing body, on February 20, 1967, sitting in review, received a notice of protest from the Railroad's attorney, but, after the hearing on the protest, the Railroad was denied any relief.

The Railroad's attorney caused a summons and complaint, dated June 19, 1967, to be served on the City and on McLean County Auditor Otto Vetter, and alleged in the complaint that the Railroad was a property owner in Wilton; that the City had formed a street improvement district to defray the total cost of the street improvements; that the City had assessed the Railroad's property

'in an arbitrary, capricious, discriminatory, unjust and inequitable manner',

thus arriving at a figure of $21,685.18,

'whereas it should be in an amount not to exceed $9,510.00 on the basis of benefit to the property';

that the Railroad had filed a timely notice of protest with the special assessment commission and an appeal from the assessment commission to the city governing body, pursuant to Chapter 40--23, North Dakota Century Code, but that such relief was denied; and that the Railroad asked the court to review and correct the assessment. The City filed an answer dated July 27, 1967, wherein it alleged that the complaint failed to state a claim for relief and, additionally, stated that the Railroad did not object to the assessment before the special assessment commission and therefore there was nothing for the city governing body to review. Further, the City claims that the Railroad admitted and accepted the benefits and, since it did not object, it waived any claim that the assessment was invalid; and that the suit was not timely commenced.

An amended complaint was served on July 24, 1967, wherein the Railroad claimed that the assessment made was

'arbitrary, capricious, discriminatory and inequitable'

so as to constitute constructive fraud, and in a manner violative of Sections 1, 13, 20, and 22 of the North Dakota Constitution and of the Fourteenth Amendment of the Constitution of the United States. The amended complaint also stated that the Railroad received no benefit from the improvements and therefore its property should not be assessed in any amount.

The City's amended answer, dated August 30, 1967, includes the allegation that the Railroad failed to exhaust its administrative remedies, and requests that the complaint be dismissed.

A trial on the merits was then held before the court and the court found that the assessment commission, in making the assessment, and the city governing body, in confirming it, had acted arbitrarily, because the Railroad had not received a special benefit in addition to the general benefit enjoyed by the entire City. The trial court remanded the case to the City of Wilton and ordered the governing body of the City to revise its assessment with regard to the Railroad's property. It is from this decision that the City appeals.

Although the Railroad and the City state the issues differently, they are basically these:

1. Is the Railroad estopped from seeking relief in the courts because of its failure to appear before the special assessment commission?

2. Was the assessment against the Railroad unjustly and improperly imposed and thus invalid?

The Railroad and the City stipulated, at the commencement of the trial, that all of the statutory requirements providing for the formation of the street improvement district had been complied with; that the proper resolutions and publications had been made; that plans and specifications were ordered, bids were let, and the contract work was completed at a cost of $425,901.59; and that the special assessment commission spread the cost over the various properties located in the improvement district within the City of Wilton.

The City contends that the Railroad is not entitled to have its assessment reviewed by the courts because it did not appear before the special assessment commission and thus did not exhaust its administrative remedies. The City relies on Hale v. City of Minot, 52 N.D. 39, 201 N.W. 848 (1924), as authority for its position.

The record indicates that the Railroad did not appear or file any objection either before or at the hearing, held on January 19, 1967, of the special assessment commission. The record further indicates that the Railroad appeared by its attorney, on February 20, 1967, before the city governing body, sitting in review of the determinations made by the special assessment commission. At this hearing, the Railroad filed a protest and also filed an appeal from the determination of the assessment commission.

It was further stipulated that the Wilton city auditor had stated that he would notify the Railroad when the hearing before the special assessment commission was scheduled, but that he had failed to do so. It was also stipulated by both parties that the necessary notices regarding the hearing had been published in the proper newspaper.

The City urges that the failure of the Railroad to appear before the special assessment commission estops it from seeking relief from the courts. The Railroad contends that it should not be estopped to take further action before the city governing body or the courts by reason of the Railroad's failure to appear before the special assessment commission. The Railroad further contends that notice by publication alone of the special assessment commission hearing would violate the due process clause of the Constitution of the United States.

The language of the statutes shows that the Railroad is not estopped to take further action before the governing body of the City, even though it did not appear before the special assessment commission. Section 40--23--14, N.D.C.C., states that:

'* * * Any aggrieved person may appeal from the action of the special assessment commission * * *.' (Emphasis added.);

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