Toch, LLC v. City of Tulsa
| Decision Date | 29 September 2020 |
| Docket Number | Case No. 118,682 |
| Parties | TOCH, LLC, an Oklahoma Limited Liability Company Plaintiff/Appellee, v. CITY OF TULSA, an Incorporated Municipality, Defendant/Appellant, and Tulsa Hotel Partners, LLC, an Oklahoma Limited Liability Company, Intervenor/Appellant. |
| Court | Oklahoma Supreme Court |
¶1 The City of Tulsa (City), Defendant, passed an ordinance creating a tourism improvement district that encompassed all properties within City which had hotels or motels with 110 or more rooms available for occupancy. Toch, LLC, Plaintiff/Appellee, owns Aloft Downtown Tulsa (Aloft) with 180 rooms. Toch filed a petition in Tulsa County District Court requesting a declaratory judgment that the ordinance is invalid for a variety of reasons, including that the district does not include all hotels with at least 50 rooms available. The court granted summary judgment to Toch based on its determination that City exceeded the authority granted in title 11, section 39-103.1. The question before this Court is whether section 39-103.1 grants authority to municipalities to limit a tourism improvement district to a minimum room-count of a number larger than 50. We answer in the affirmative.
¶2 In October 2018, City proposed an ordinance to create Tulsa Tourism Improvement District No. 1 (TID). City limited the prospective district to "those properties within the geographical area of the City of Tulsa on which a hotel or motel, which in either case has one-hundred ten (110) or more rooms available for occupancy, is located." The proffered assessment-area map outlined the Tulsa corporate limits with bullet points noting the location of each hotel. The attached estimated-assessment roll listed thirty-three hotels and motels and contained hotel names, property owners, and legal descriptions for each property. Pet. Ex. A. The resolution stated that the "list of each Property on the assessment plat shall be updated as of each April 1 when the annual assessment roll is prepared." Id.
¶3 On November 5, 2018, Trevor Henson filed a letter with City which stated in relevant part:
Pet. Ex. B. On November 7, 2018, Henson filed a second opposition letter with City. Later that day at the City Council hearing, Henson, John Snyder, Lee Levinson, and three other individuals all made public comments in opposition to the creation of the TID. Joint Mot. for Summ. J. Ex. 3. Also at the hearing, Henson presented City Council with a copy of both previously filed objection letters before it voted unanimously in favor of the TID.
¶4 On December 6, 2018, Toch filed a petition in Tulsa County District Court requesting invalidation of the TID for a plethora of reasons, including that the creation and boundaries of the assessment roll were arbitrary, creation of the TID was outside of the authorities granted to City under title 11, section 14-101,2 and the size of the TID was arbitrary because it would not reasonably benefit its members but would benefit properties that were not included.3 The petition stated that Toch's "primary business is owning and operating the Aloft Hotel located in Downtown Tulsa." Pet. 1. The petition noted that "[i]n order to simplify proceedings [Toch] is the only named Plaintiff and is acting as a representative on behalf of the parties that have collectively objected to the assessment and creation of the TID." Pet. 1 n. 1.
¶5 Over the next nine months, Toch filed a motion for summary judgment, Tulsa Hotel Partners (Intervenor) filed a motion to intervene, and City and Intervenor (together "Appellants") filed a joint-motion for summary judgment. Prior to the hearing on summary judgment, Toch argued that the TID violated both article V, section 59 of the Oklahoma Constitution as a special law, and the Equal Protection Clause of the United States Constitution, when it did not seek to also assess hotels with 50 through 109 rooms. Appellants argued that City was authorized to create the TID under title 11, sections 14-101 and 39-103.1 and the creation of the TID was a valid exercise of municipal power. In a footnote to their argument that the TID is not a special law, Appellants asserted that Toch's argument that the statute does not allow City to limit the TID "to hotels with 110 rooms or more is both immaterial to an analysis of special laws and incorrect" as the statute clearly permitted City "to choose the size of hotels it assesses, so long as the hotels have at least 50 rooms." Reply in Supp. of Joint Mot. for Summ. J. 3 n. 5, Oct. 2, 2019.
¶6 At the hearing on the motions for summary judgment, Toch argued that City did not have the authority to require 110 rooms, instead of 50, as a basis for inclusion in the TID and City had no legislative purpose to set the higher floor except attempting to garner enough support for passage. When questioned by the court about the statute potentially requiring inclusion of all hotels with 50 or more rooms, Appellants asserted that the legislature's use of the disjunctive or expressed a choice and the legislature would have written "at least 50" if it intended municipalities to include all hotels with 50 or more rooms. Appellants argued that the legislature intended to provide flexibility so municipalities could determine their own special needs and draw appropriate distinctions. Further, Appellants argued that if the statute was ambiguous, the city council "makes the call on how to apply it."
¶7 In February 2020, the district court granted in part and denied in part Toch's motion for summary judgment and denied Appellants' motion for summary judgment. The journal entry incorporated the court's twenty-one page order, wherein the court summarized Toch's arguments on summary judgment down to three points, but only granted the motion based on the first: "the TID was improperly created because the City did not use the 50 room threshold as authorized by 11 O.S. § 39-103.1 but rather arbitrarily established a threshold of 110 rooms." Order 5, Jan. 15, 2020.4
¶8 The district court determined that, "any citizen of Tulsa and certainly any hotel in the TID could at any time bring an action for determination of whether [City] has followed the law in creating the TID." Order 20-21. The court ultimately ruled:
The Legislature did not grant to [City] the authority to legislate the number of rooms a hotel must have in order to be subject to the TID . The level set by the legislature, "50 or more rooms" is "perfectly clear" and unambiguous. .... A number of questions raised by [Toch] are not reached in the determination of this matter because the enabling statute simply does not grant authority to [City] to set a threshold for creation of a TID. The threshold created by the legislature is 50 or more rooms.
Order 20-21 (emphasis added). In performing a partial analysis of the TID as a special law under article V, section 59 of the Oklahoma Constitution, the court noted, but failed to address, Appellants' argument that the language of title 11, section 39-103.1 permits City to choose the size of hotels it assesses. Order 18. Instead, the court continued on with its special law analysis of the TID and then granted summary judgment based on the undiscussed, yet dispositive, issue.
¶9 Appellants timely filed a petition in error and now argue in relevant part that the district court erred in granting summary judgment when it (1) held that any citizen of Tulsa and certainly any hotel in the TID could bring an action to challenge the City's proper creation of the TID at any time, and (2) found sua sponte that municipalities can create a TID under section 39-103.1 only if all hotels with at least 50 rooms are included.5 Appellants requested that we retain the appeal and grant leave to submit additional briefing because the district court ruled based on a theory they had not been allowed to dispute. We did both.
¶10 In their Brief in Chief, Appellants allege that title 11, section 39-103.1 sets a floor for the minimum size of hotels which may be included.6 Appellants claim that the district court ignored all but the words "50 or more" in order to find a statutory requirement for municipalities to include all hotels with at least 50 rooms. Appellants note that the plain meaning of the disjunctive or is an alternative between one or more choices; accordingly, Appellants argue that the statute grants municipalities discretion to tailor districts to their unique socio-economic circumstances so long as each hotel has a minimum of 50 rooms.
¶11 Appellants argue that within the context of the tourism statute, the language "50 or more" can only be interpreted as a floor because sections 39-103.1 and 39-1047 provide broad discretion to the municipality. Appellants contend that the district court's "rigidity flies in the face of the general purpose of the Act" and does not provide the flexibility needed for both large and small cities. Appellants submit arguendo that even if the Court finds the statute created a level,8 the TID is still proper because, "[h]ere, the ‘geographical area’ of the [TID] is not synonymous with the city limits of Tulsa, but rather consists of the non-contiguous properties" described on the attached assessment role "with hotels that have 110 or more rooms." Appellants' Br. in Chief 11.
¶12 Appellants further argue that the district court erred in allowing Toch to challenge the TID. Appellants note that section 39-108(D) specifically mandates that challenges to creation of a tourism...
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...in the negative.I. STANDARD OF REVIEW ¶2 Summary judgment settles only questions of law, therefore it is reviewed de novo . Toch, LLC v. City of Tulsa , 2020 OK 81, ¶ 15, 474 P.3d 859, 865. Statutory interpretation is also a question of law subject to de novo review. Thurston v. State Farm ......