Town of Wilson v. City of Sheboygan

• Decision Date: 14 February 2020
• Docket Number: No. 2018AP2162,2018AP2162
• Citation: 2020 WI 16,390 Wis.2d 266,938 N.W.2d 493
• Parties: TOWN OF WILSON, Plaintiff-Appellant, v. CITY OF SHEBOYGAN, Defendant-Respondent.
• Court: Wisconsin Supreme Court

390 Wis.2d 266

938 N.W.2d 493

2020 WI 16

TOWN OF WILSON, Plaintiff-Appellant,

v.CITY OF SHEBOYGAN, Defendant-Respondent.

No. 2018AP2162

Supreme Court of Wisconsin.

Oral Argument: September 19, 2019

Opinion Filed: February 14, 2020

For the plaintiff-appellant, there were briefs filed (in the court of appeals) by Michael D. Huitink and Sorrentino Burkert Risch LLC, Brookfield. There was an oral argument by Michael D. Huitink.

For the defendant-respondent, there was a brief filed (in the court of appeals) by H. Stanley Riffle and Municipal Law & Litigation Group, S.C., Waukesha. There was an oral argument by H. Stanley Riffle.

For amicus Wisconsin Towns Association, a brief was filed by Joseph Ruth, Shawano.

For joint amici League of Wisconsin Municipalities and NAIOP – Wisconsin there was a brief filed by Julie M. Gay and Law Office of Julie M. Gay, Waukesha, Thomas D. Larson, Madison, and Claire Silverman, Madison.

REBECCA FRANK DALLET, J.

¶1 Kohler Company sought to convert 247 acres of land located in the Town of Wilson into a world championship golf course. After determining that the golf course development would not come to fruition if the land remained within the Town's boundaries, Kohler successfully petitioned for annexation to the City of Sheboygan. In response, the Town filed a declaratory judgment action alleging that the annexation was "arbitrary, capricious, non-contiguous, an abuse of discretion, and otherwise procedurally and substantively non-compliant with [the City's] annexation authority under Chapter 66, Wis. Stats, and existing Wisconsin case[ ]law." The City moved for partial summary judgment regarding the annexation petition's compliance with the population certification requirement in Wis. Stat. § 66.0217(5)(a) (2017-18), which was granted.¹ The circuit court ultimately conducted a bench trial and concluded that the annexation satisfied the statutory contiguity requirement and the "rule of reason."² The circuit court further concluded that the annexation petition fully satisfied the procedural requirements of § 66.0217. Consequently, the circuit court dismissed the action in full.

¶2 On bypass³ from the court of appeals, the Town asks us to review whether: (1) the annexation satisfies the statutory contiguity requirement; (2) the annexation satisfies the rule of reason; (3) the annexation petition strictly complied with the signature requirements in Wis. Stat. § 66.0217(3) ; and (4) the annexation petition strictly complied with the population certification requirement in § 66.0217(5)(a). We conclude that the annexation is contiguous and satisfies the rule of reason. We also conclude that the annexation petition strictly complied with §§ 66.0217(3) and (5)(a). Therefore, we affirm the circuit court.

I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE

¶3 For nearly 80 years Kohler has owned 247 acres of undeveloped land abutting Lake Michigan located within the Town's boundaries. In March 2014, Kohler submitted an application with the Town for a conditional use permit to develop the land into a world championship golf course. After Kohler's plan went public, there was immediate opposition to the proposed development by the Town's citizens. The opposition centered on environmental concerns, deforestation, and perceived impacts to residential wells. By 2015, three of the five members of the Town Board were known to oppose the development, decreasing the likelihood that Kohler's application would be approved.

¶4 Due to unfolding Town Board opposition and concerns about the Town's ability to provide adequate water and fire services to the proposed development,⁴ Kohler approached the City about the possibility of annexing its property and adjacent lands. The City was interested in Kohler's proposal as it "had historically targeted the lands within the annexation, including the Kohler Land, for future City expansion, development and economic growth as a part of the City's 2011 Comprehensive Plan." The City was also facing a substantial need for housing, which was stunting economic growth. Annexation would allow the City to immediately address its housing needs by developing the land adjacent to Kohler's property. It was a mutually beneficial arrangement for Kohler and the City: annexation was a means for Kohler to achieve its goal of developing its land into a golf course and for the City to achieve its goal of economic growth.

¶5 Kohler independently designed the boundaries of the territory subject to the proposed annexation, without the City's assistance. To increase its size and shape, Kohler included a large amount of state land in its proposal. Kohler also purchased several of the properties located within the territory. Pursuant to Kohler's design, the border between the City and the first parcel of the territory spans approximately 650 feet in width. The territory proceeds in a southeasterly direction and varies in size from 1,450 feet wide at certain points to 190 feet wide before expanding to the proposed golf course development. The map of the annexation is attached as an appendix to this opinion.

¶6 Kohler initiated the annexation process in April 2017 by publishing a notice in the Sheboygan Press and sending a "Request for Annexation Review" to the Department of Administration ("DOA"). Kohler then circulated a "Petition for Annexation by One-Half Approval" (the "Petition") in accordance with Wis. Stat. § 66.0217(3)(a).⁵ The Petition stated that its purpose was to "make City of Sheboygan services available to the territory and to ready the territory for development consistent with the City of Sheboygan's 2011 Comprehensive Plan." According to the Petition, the population of the territory subject to the proposed annexation included six adults and three children. Kohler obtained five signatures for the Petition from owners representing over one-half of the real property in assessed value within the territory, as required by § 66.0217(3)(a) 1.b.⁶

¶7 DOA issued a nonbinding recommendation in favor of the annexation and found it in the "public interest," as defined in Wis. Stat. § 66.0217(6)(c).⁷ DOA determined that the annexation was contiguous to the City "via a quarter-quarter sized parcel of city-owned territory approximately 650-feet wide."

¶8 Shortly thereafter, the City's Common Council adopted two ordinances: one annexing the territory included in the Petition and another zoning the land as suburban residential. Additionally, the Common Council approved a pre-annexation agreement between Kohler and the City.⁸

¶9 The Town filed suit against the City in the circuit court and moved for a temporary injunction, which was denied. The parties filed cross-motions for summary judgment regarding the validity of the annexation pursuant to Wis. Stat. ch. 66 and the rule of reason. The circuit court denied summary judgment based on disputed issues of material fact regarding statutory contiguity, the rule of reason, and the Petition's compliance with the procedural requirements set forth in Wis. Stat. § 66.0217. The circuit court subsequently granted the City's partial motion for summary judgment as to the Petition's compliance with the population certification requirement in § 66.0217(5)(a).⁹ The case proceeded to a bench trial. The trial centered on the Town's claim that the annexation was not contiguous and violated the rule of reason.

¶10 In November 2018, the circuit court issued a written decision concluding that: (1) the annexation satisfied the statutory contiguity requirement in Wis. Stat. § 66.0217(3) ; (2) the annexation did not violate the rule of reason; and (3) the Petition fully complied with the procedural requirements set forth in § 66.0217.¹⁰ Accordingly, the circuit court dismissed the Town's declaratory judgment action in full. The Town petitioned this court to bypass the court of appeals, which we granted.

II. STANDARD OF REVIEW

¶11 The legislature has conferred broad authority on cities and villages to annex unincorporated lands under Chapter 66 of the Wisconsin Statutes. See Town of Pleasant Prairie v. City of Kenosha, 75 Wis. 2d 322, 326-27, 249 N.W.2d 581 (1977). Annexation ordinances have long enjoyed a presumption of validity. Id.; see also Town of Lafayette v. City of Chippewa Falls, 70 Wis. 2d 610, 618, 235 N.W.2d 435 (1975). A party challenging an annexation ordinance bears the burden of overcoming this presumption by demonstrating that the circuit court's findings are contrary to the great weight and clear preponderance of the evidence. Town of Waukechon v. City of Shawano, 53 Wis. 2d 593, 596, 193 N.W.2d 661 (1972).

¶12 In order to resolve the Town's contention that the annexation is not contiguous and that the Petition failed to comply with the procedural requirements set forth in Wis. Stat. § 66.0217, we engage in statutory interpretation. Statutory interpretation is a question of law that we review de novo.

Horizon Bank, Nat'l Ass'n v. Marshalls Point Retreat LLC, 2018 WI 19, ¶28, 380 Wis. 2d 60, 908 N.W.2d 797.

¶13 We also review the circuit court's application of the rule of reason, a doctrine designed to determine whether the power delegated to cities and villages under Chapter 66 has been abused under the facts and circumstances of a given case. See Town of Pleasant Prairie, 75 Wis. 2d at 326-27, 249 N.W.2d 581. To pass muster under the rule of reason, an annexation must satisfy three requirements:

(1) exclusions and irregularities in boundary lines must not be the result of arbitrariness; (2) some reasonable present or demonstrable future need for the annexed property must be shown; and (3) no other factors must exist which would constitute an abuse of discretion on the part of the municipality.

Town of Menasha v. City of Menasha, 170 Wis. 2d 181, 189, 488 N.W.2d 104 (Ct. App. 1992). A failure to satisfy any one of the prongs renders an annexation arbitrary, capricious, and invalid. Town of Lafayette, 70 Wis. 2d at 625, 235 N.W.2d 435.

¶14 We accept the circuit court...