Thunderbird Motel, Inc. v. City of Portland

• Decision Date: 18 June 1979
• Docket Number: No. A77-09-13031,No. 11091,A77-09-13031,11091
• Parties: THUNDERBIRD MOTEL, INC., an Oregon Corporation, and Tod E. McClaskey and Edward H. Pietz, dba Red Lion Motor Inn at Portland Center, Appellants, v. The CITY OF PORTLAND, Oregon, a municipal corporation, Portland Development Commission, an agency of the City of Portland, Oregon, Moran Construction Co., a corporation, Marriott Corporation, a corporation, Respondents, First National Bank of Oregon, a corporation, and Equitable Life Assurance Society of the United States, a corporation, Defendants. ; CA Court of Appeals of Oregon
• Court: Oregon Court of Appeals

Page 994

596 P.2d 994

40 Or.App. 697

THUNDERBIRD MOTEL, INC., an Oregon Corporation, and Tod E McClaskey and Edward H. Pietz, dba Red Lion Motor Inn at Portland Center, Appellants, v. The CITY OF PORTLAND, Oregon, a municipal corporation Portland Development Commission, an agency of the City of Portland, Oregon, Moran Construction Co., a corporation Marriott Corporation, a corporation, Respondents First National Bank of Oregon, a corporation, and Equitable Life Assurance Society of the United States, a corporation, Defendants.

Trial Court No. A77-09-13031; CA No. 11091.

Court of Appeals of Oregon.

Argued and Submitted March 2, 1979.

Decided June 18, 1979.

Mark McCulloch, Portland, argued the cause for appellants. With him on the briefs were Powers & McCulloch, and Stuart W. Hill, McClasey, Paauwe & Wilcox, Portland.

William B. Crow, and Donald R. Stark, Portland, argued the cause for respondents. With them on the brief were Miller, Anderson, Nash, Yerke & Wiener, Richard A. Cantlin, Jr., and Robert L. Hurtig, Portland.

Before THORNTON, P. J., and LEE and GILLETTE, JJ.

GILLETTE, Judge.

In July, 1977, the City of Portland, through the Portland Development Commission (Commission), and Moran Construction Co. (Moran) entered into a contract pursuant to which the City sold Moran a block in the South Auditorium Urban Renewal Project on which Moran is constructing a hotel. The contract provides that the City is to build tennis courts on a block adjacent to the hotel site; that the City will construct a skybridge between the hotel and a parking structure on a nearby block; that the City will subsequently reach agreement with Moran or its successors pursuant to which the latter will manage and operate the tennis courts and skybridge as public facilities; and that the City will develop the waterfront area in the vicinity of the hotel to complement the other improvements.

Thunderbird Motel, Inc.'s original complaint alleged Inter alia that the construction of the skybridge "at public expense for private use" is prohibited by Article XI, section 9 of the Oregon Constitution, that the City and Commission lack "jurisdiction" to grant the management of the publicly owned skybridge and tennis courts to private persons, and that the City's agreement to develop the waterfront property is too vague to be enforceable.

The trial court granted partial summary judgment for the defendants on all issues presented by Thunderbird's original complaint. Earlier, however, the trial court had allowed Thunderbird's motion to file an amended complaint. Thunderbird was joined as a plaintiff in the amended complaint and in a second amended complaint by two individuals who do business as the Red Lion Motor Inn at Portland Center. Those later complaints allege, Inter alia, that the planned location of the hotel and of the tennis courts violates the land use plan for the South Auditorium Urban Renewal Project and that the price for which the City sold the hotel site to Moran was less than the minimum amount the applicable Oregon statute requires. After trial, the court below ruled for the defendants and entered a decree of dismissal. Plaintiffs appeal, and we affirm.

Before reaching the merits of this case, we must first consider defendants' contentions that this court does not have jurisdiction over some or all of the issues the plaintiffs raise, and that the plaintiffs do not have standing to bring the appeal. Defendants' contentions are based primarily on the somewhat unusual procedural history of the litigation. The original complaint was filed by the plaintiff Thunderbird Motel, Inc., as the sole plaintiff. Defendants filed their motion for summary judgment on October 25, 1977. Three days later, the trial court granted Thunderbird's motion to file an amended complaint. In November, 1977, the trial court granted partial summary judgment for the defendants as to all issues raised in Thunderbird's original complaint, but continued the case for further proceedings on the matters to be presented by the amended complaint.

In December 1977, Thunderbird, joined by the additional plaintiffs who are now parties to the case, filed an amended complaint alleging the same grounds for the contract's illegality which Thunderbird had alleged in its original complaint, and also alleging the other matters we have described. Defendants moved and the court ordered that the allegations in the amended complaint which had previously been disposed of by the partial summary judgment order be stricken. In this appeal, the defendants do not assign as error the order striking those allegations. In February 1978, the second amended complaint was filed. After trial, the court ruled for defendants on the remaining issues in that complaint and entered its decree of dismissal.

On December 27, 1977, Thunderbird filed a notice of appeal from the partial summary judgment which had been granted the preceding month. We dismissed that appeal on March 17, 1978, because Thunderbird failed to file an appellant's brief. Defendants now argue that Thunderbird cannot bring this appeal because it has already had its appeal. Defendants further argue that none of the other plaintiffs can appeal from the partial summary judgment because they were not parties to the case at the time the partial summary judgment order was entered. Defendants conclude that if anything can be considered in this appeal, our review is limited to the matters which were not decided by the trial court's partial summary judgment order. We disagree. ORS 19.010(2)(a) provides:

"For the purpose of being reviewed on appeal the following shall be deemed a judgment or decree:

"(a) An order affecting a substantial right, and which in effect determines the action or suit so as to prevent a judgment or decree therein."

The partial summary judgment order was not appealable under that definition, because the issues to be raised in the amended complaint remained to be determined, and no judgment or decree could be entered until the amended complaint was adjudicated. ¹ See Smallwood v. Erlandson, 281 Or. 699, 576 P.2d 374 (1978); Cf. ORS 18.125. The fact that Thunderbird did purport to appeal from the partial summary judgment and that that appeal was dismissed because of Thunderbird's failure to file a brief is not dispositive. The proceedings on Thunderbird's appeal from the partial summary judgment order were a nullity. We had no jurisdiction. The only appealable order in this case is the decree of dismissal and, in appealing from it, Thunderbird may now raise all issues which it preserved and which were decided adversely to it at any stage of the proceedings, including those which were determined by the partial summary judgment order. ²

The defendants also argue that none of the plaintiffs have standing. Thunderbird alleged in its original complaint, upon which the partial summary judgment was rendered, that the legal effect of the challenged contract,

" * * * will likely be an economic detriment to the plaintiff as a taxpayer of the City of Portland. This legal effect will also likely be an economic detriment to the plaintiff in plaintiff's operation of its motel and restaurant business because the subsidy will provide the new hotel with certain paid construction costs thereby reducing the debt it must service which will encourage greater profitability."

Defendants argue that

"neither the general interest of a taxpayer absent some special injury not showed by other taxpayers nor the alleged negative effect of increased competition is sufficient to confer standing."

It is not clear that the allegations in Thunderbird's original complaint give rise to Taxpayer standing in light of Gruber v. Lincoln Hospital District, 285 Or. 3, 588 P.2d 1281 (1979). However, we hold that the alleged negative effect of Increased competition is sufficient to confer standing. See Ore. Newspaper Pub. v. Peterson, 244 Or. 116, 121, 415 P.2d 21 (1966).

The question of whether the other plaintiffs have standing for any purpose and whether any of the plaintiffs have standing to raise the issues not decided by the partial summary judgment is closer. Although the amended complaint alleged standing on several bases, the only allegation of standing in the Second amended complaint was that:

"Plaintiff Red Lion owns property and operates within the boundaries of the South Auditorium Urban Renewal Project and is entitled to rely upon the land use plan for this urban renewal area that does not permit the construction of a hotel on Block 115 * * *, nor construction of tennis courts to the east of Front Street."

At the outset, we note that the second amended complaint contains no allegation that any of the plaintiffs other than Red Lion has standing. Defendants argue that Red Lion's allegation is not sufficient to give it standing because Red Lion is located in Area I of the urban renewal project, while the hotel site is located in Area II of the project. Defendants analogize standing for present purposes to the decisions of the Supreme Court and this Court relating to standing in land use cases. Whether or not defendant's analogy is good, it is not definitive. The interests of persons owning property or doing business in an urban renewal project go beyond the more generalized interest of property owners in land use actions. An urban renewal plan is a unified scheme, the value of which to any participant is at least arguably dependent upon uniform application to all participants and all the effected land. Under the circumstances, we are not prepared to hold that Red Lion does not have standing to raise the issues presented by the second amended complaint.

Because one or more of the plaintiffs have standing to raise all of the matters which are presented by their appeal, we turn to the merits.

Plaintiffs' principal arguments on appeal are, first, that the contract between the City and Moran violates Article XI, section 9 of the...