State ex rel. City of Monett v. Lawrence Cnty., s. SD 31500
| Decision Date | 01 October 2013 |
| Docket Number | SD 31502.,Nos. SD 31500,s. SD 31500 |
| Citation | 407 S.W.3d 635 |
| Parties | STATE of Missouri, ex rel., CITY OF MONETT, Missouri, Respondent, v. LAWRENCE COUNTY, Missouri, Kelli McVey, Sharon Kleine, Defendants, Barry County, Missouri, Gary Youngblood, Janice Varner, and Lois Lowe, Appellants, Barry County Emergency Services E–911 Board, Appellant. |
| Court | Missouri Court of Appeals |
OPINION TEXT STARTS HERE
Cordelia F. Herrin, David A. Cole, Ellis, Cupps and Cole, Cassville, for Appellant.
Mary Jo Shaney, Kevin Mason, White Goss Bowers March Schulte & Weisenfels, PC, Kansas City, for Respondent.
This appeal involves tax increment financing (TIF).1 There are two principal questions:
1. Can a county watch TIF projects be undertaken and completed, and collect, distribute, and retain TIF monies related thereto, all for years without protest, then claim the TIF actions were void ab initio?
2. Is an E–911 tax subject to TIF allocation if voters approved the tax after the TIF district was created?
The trial court said “no” and “yes” respectively on summary judgment. We upholdthose rulings, reject other complaints on appeal, and affirm the judgment entered in favor of the City of Monett (“City”) and against Barry County and certain elected officials (collectively “County”) and the Barry County E–911 Board (“Board”).2
The TIF Act authorizes municipalities to adopt and finance redevelopment plans for blighted areas with the purpose to create in such areas new and substantial sources of sales tax revenue. See State ex rel. Village of Bel–Ridge v. Lohman, 966 S.W.2d 356, 357 (Mo.App.1998).
City created one TIF district in 1996 and another in 2005. In each instance, City created a TIF commission and County appointed a representative who actively participated. County received the proposed redevelopment plan and notice of the public hearing. After the public hearing, the TIF commission recommended that City approve the plan, which City did by ordinance.
The 1996 TIF district included, as core projects, highway improvements and a Wal–Mart Supercenter. The 2005 TIF district included a Lowe's home improvement center. City pledged TIF allocation funds and issued over $9 million in bonds, etc., to finance these redevelopments.
After redevelopment, these areas generated new County sales tax revenues totaling millions of dollars. County kept 50% of these monies and sent 50% to City for reimbursement of TIF redevelopment costs, starting in 1997. See § 99.845.3; Lohman, 966 S.W.2d at 357.
After creation of both TIF districts, County voters adopted a § 190.335 emergency services sales tax (“E–911 tax”). Through November 2010, the TIF districts generated nearly $1 million in E–911 tax revenue, none of which was allocated or paid to City.
County stopped allocating TIF monies in July 2009. City sued in mandamus to enforce TIF allocation. County and Board filed an amended answer and counterclaim which denied that the TIF districts were validly created or that the E–911 tax was subject to TIF capture in any event.
City prevailed on the parties' cross-motions for summary judgment. In a 46–page judgment, the trial court found, inter alia, that County's counterclaims and defenses were barred by laches and estoppel, the TIF districts were validly enacted, and the E–911 tax was subject to TIF allocation.
County and Board appeal, raising a total of five points.
Points I and II reassert County's claims that the 1996 and 2005 TIFs were not validly created and, thus, void ab initio. In Point III, County urges that projects “approved in 1998 and 2007 did not meet the requirements of the TIF Act in effect at those times.” Point V challenges trial court findings that laches or estoppel barred the foregoing complaints.3 Finding no merit to Point V as stated, we need not reach Points I–III.4
We begin by quoting at length from the judgment's disposition of County's claims and defenses based on laches and estoppel:
In the instant case, the 1996 TIF District was adopted over thirteen years prior to Respondents' bringing their counterclaims. The 2005 District was adopted four years prior to Respondents' counterclaims. Prior to November 2009, Respondents had not initiated any challenges to the validity of the TIF Districts. In each instance, the Counties' representatives were members of the TIF Commission approving the TIF District's redevelopment plans and projects. Respondents actively participated in the creation of the TIF Districts, watched while improvements under the TIF Districts were made, collected increased sales tax revenues derived from the TIF Districts and refrained from making any claim until the City sought to enforce its rights under the TIF Districts in this lawsuit.
Since the approval of the TIF Districts, projects identified in the TIF Districts have been constructed. Wal–Mart, Lowe's and road improvements have all been made as contemplated by the TIF Districts [sic] plans. Bonds have been issued and the City has entered into redevelopment agreements with Wal–Mart and Lowe's that require the City to reimburse these developers with costs associated with construction of the TIF District projects. The City continued to implement its TIF District plans in light of the Counties' participation and silent acquiescence.
The issuance of bonds is significant. R.S.Mo. 99.835.4 provides that recitals in bond issuances that they are issued pursuant to the TIF Act are given conclusive evidence of their validity. Not only did bond holders rely on the validity of the TIF Districts, numerous third parties relied as well. Wal–Mart, Lowe's, the Missouri Highway and Transportation Commission and the City all spent funds to construct the TIF District improvements, improvements known to the Counties and approved by the Counties, while the Counties sat on their claims. The TIF Act presumes validity when bonds are issued. This Court should defer to the legislature's intent.
Until 2009, Respondents performed under the TIF Act as if the TIF Districts were valid. Respondents allocated sales taxes and PILOTs to the City. Pursuant to the TIF Act, each dollar of increased tax from within the TIF Districts was split 50/50 between the Counties and the City's special allocation funds. Respondents accepted the increased taxes generated within the TIF Districts. Respondents acted as if the TIF Districts were valid. Respondents benefitted from the validity of the TIF Districts. See State ex rel. York v. Daugherty, 969 S.W.2d 223, 226 (Mo. banc 1998) (parties to a void judgment are estopped from attacking it when they perform acts required by a void decree or accept its benefits.)
Respondents' delay in bringing its claim has worked an injustice on the City. Respondents and their witnesses have limited or no knowledge regarding the claims they bring. Without attacking whether the City's findings were in fact accurate when made, Respondents' claims demand that the City recreate events that occurred years prior. Respondents insist that the City justify its actions and substantiate judgments made long after memories have faded. This insistence allows the Respondents to pick apart the City's actions, with 20/20 hindsight, and second guess the evidence that City witnessed and considered based on a “record” that is not required under the TIF Act. This recreation of events is precisely what the doctrine of laches seeks to prohibit.
The Counties' belated attacks on the City's TIF Districts and legislation would disrupt settled expectations after years of work and reliance by various parties while, at the same time, allow the Counties to conduct themselves with impunity, as if they had no role or participation, and as if they have received no benefit. This is precisely the circumstance prohibited under Missouri law, and in which the doctrine of laches or estoppel should be applied. The entry of Summary Judgment is proper under the doctrines of laches or estoppel.
County does not deny the foregoing facts in Point V, nor argue that they would not support laches or estoppel against a private party in other circumstances. Rather, Point V offers three special objections to applying laches or estoppel here, with two pages of supporting argument, in total, as to all three of these sub-claims.
The lone cited authority is North v. Hawkinson, 324 S.W.2d 733, 742 (Mo.1959), which County partially quotes as stating that the “question of laches is one of fact which can better be determined upon the trial of the merits from all the facts and circumstances.” County omits the beginning of that sentence (“Also, the claim of laches is not pressed on this appeal ...”), which shows why North is distinguishable. We may agree with the partial quote in general, but nothing in North or County's scant argument indicates why a trial was needed here.
Point V does not allege any specific deficiency in the record, dispute the facts cited by the trial court, or (aside from its next two sub-claims) suggest why those facts do not support application of laches or estoppel. As seen hereafter, the facts cited here compare favorably with prior cases where such relief was upheld. In addition, see Rodgers v. Seidlitz Paint & Varnish Co., 404 S.W.2d 191, 198 (Mo.1966) (); Comens v. SSM St. Charles Clinic Med. Group, Inc., 258 S.W.3d 491, 497 (Mo.App.2008) (similar, citing Rodgers). We reject this sub-claim.
County correctly notes that...
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