Wade v. City Of Pierre

• Decision Date: 30 June 2010
• Docket Number: No. 25312.,25312.
• Citation: 784 N.W.2d 499,2010 S.D. 55
• Parties: Wade and Lisa HUBBARD, et al., Plaintiffs and Appellees,v.CITY OF PIERRE, South Dakota, Defendant and Appellant.
• Court: South Dakota Supreme Court

784 N.W.2d 499

2010 S.D. 55

Wade and Lisa HUBBARD, et al., Plaintiffs and Appellees,v.CITY OF PIERRE, South Dakota, Defendant and Appellant.

No. 25312.

Supreme Court of South Dakota.

Argued Jan. 14, 2010.

Decided June 30, 2010.

COPYRIGHT MATERIAL OMITTED

Charles P. Schroyer of Schmidt, Schroyer, Moreno, Lee & Bachand, PC, Pierre, South Dakota, Attorneys for plaintiffs and appellees.

Lindsey Riter-Rapp, Robert C. Riter, Jr. of Riter, Rogers, Wattier & Northrup, LLP, Pierre, South Dakota, Attorneys for defendant and appellant.

Larry A. Nelson of Frieberg, Nelson & Ask, LLP, Canton, South Dakota, E. James Hood of Hood & Nies, PC, Spearfish, South Dakota, Attorneys for amicus SD Municipal League.

MEIERHENRY, Justice.

[¶ 1.] Wade and Lisa Hubbard et al. (Petitioners) brought a declaratory judgment action against the City of Pierre, South Dakota. The Petitioners sought to enjoin the City from imposing special assessments for curb, gutter, and driveway replacements as part of a street reconstruction project. The Petitioners claimed that the City's special assessments were imposed in violation of the Fifth Amendment of the United States Constitution and Article VI, Sections 2 and 13 of the South Dakota Constitution. The circuit court agreed and entered a declaratory judgment against the City and an injunction prohibiting the City from collecting the special assessments. The City appeals.

FACTS AND PROCEDURAL BACKGROUND

[¶ 2.] In 2007, the City began a street improvement project on North Grand Avenue, East Dakota Avenue, and North Tyler Avenue. The improvement project's primary purpose was to replace water mains, but it also involved reconstructing and resurfacing streets, replacing sewer mains, and replacing portions of curb, gutter, and driveways. The Petitioners' residential properties were located on the streets affected by this project.

[¶ 3.] Before the project began, City officials inspected each property's curb and gutter to determine its condition. The officials determined that the curb and gutters' installation dates ranged from the 1930s to as recently as 2006. The projects on Tyler and Dakota Avenues involved total reconstruction of the street but only partial reconstruction of the curb and gutter. The City determined that the project on North Grand Avenue required complete reconstruction of the street and the curb and gutter.

[¶ 4.] In February 2007, the City proposed a resolution of necessity to “install, repair or rebuild curb and gutter, associated concrete work, and sidewalks on certain streets, avenues, and alleys in the City of Pierre, South Dakota” and to levy individual special assessments at a set rate per linear foot of reconstructed curb and gutter and a set rate per square foot of reconstructed driveway approaches. See SDCL 9-45-20. Owners of the abutting lots were notified. See SDCL 9-45-23. Several Petitioners, including property owners Wade Hubbard and Ben Orsbon, appeared at the City Commission meeting on February 27, 2007, to object to the proposed resolution of necessity regarding the special assessments. The Petitioners challenged the resolution, arguing that the assessments would constitute a taking of private property in violation of the United States Constitution and the South Dakota Constitution. The City Commission took no action at the February 27, 2007, meeting, but later adopted the proposed resolution without amendment on March 20, 2007. The resolution was not challenged by referendum or written protest. See SDCL 9-45-26.

[¶ 5.] The reconstruction project proceeded as planned and was completed in the fall of 2007. The City filed its assessment roll on November 1, 2007, and set a public hearing for December 4, 2007. See SDCL 9-43-11; SDCL 9-43-14. The City assessed each lot the per linear foot cost for curb and gutter replacement and per square foot cost for driveway replacement. The Petitioners' counsel appeared at the public hearing and again challenged the constitutionality of the special assessments. The City Commission approved the assessment roll and its publication. See SDCL 9-43-15; SDCL 9-43-25. On December 14, 2007, the City notified all affected property owners of the amount specially assessed against each lot. On January 2, 2008, the Petitioners filed a timely petition in circuit court challenging the special assessment. The Petitioners sought a declaratory judgment and permanent injunction against the City.

[¶ 6.] The Petitioners challenged the City's decision to impose special assessments for replacing curb, gutter, and driveways. They contended that the City violated the Fifth Amendment of the United States Constitution and Article VI, Sections 2 and 13 of the South Dakota Constitution because the amount of the special assessments exceeded the benefits received. The Petitioners claimed replacing curb, gutter, and driveways gave no benefit to the abutting lots. Alternatively, the Petitioners argued that the City would have had to assess each lot based on the benefits received according to SDCL 9-45-32 rather than on the per linear foot cost of the construction authorized in SDCL 9-45-30. The Petitioners did not challenge the constitutionality of any statutes.

[¶ 7.] The circuit court determined that either method of assessment-per linear foot or accrued benefits-required a showing of special benefits to the assessed property. The circuit court also concluded that the special assessments for the replacement curb and gutter constituted an unconstitutional taking in violation of the South Dakota and United States Constitutions and enjoined the City. The City appeals, claiming that the circuit court erred as follows: (1) by misinterpreting SDCL 9-45-30 and SDCL 9-45-32; (2) by not giving proper deference to the City's decision to impose special assessments for replacement curb, gutter, and driveways, and by allowing general assertions to prevail over examination of each specific property before and after construction; and, (3) by concluding that the Petitioners did not receive a special benefit above and beyond that enjoyed in common with the public.

ANALYSIS

Application of Special Assessment Statutes SDCL 9-45-30 and SDCL 9-45-32

[¶ 8.] Cities are given the power to apportion special assessments for local improvements against “property fronting or abutting upon the improvement.” SDCL 9-43-5; SDCL 9-43-8. In this case, statutes govern the methods of apportioning street improvements, including curb and gutter. SDCL 9-45-30 provides assessment based on front footage:

The cost of the improvement except the cost of street and alley intersections may be assessed to the property fronting or abutting on the improvement. Such cost of each portion of the project on which the construction is by resolution substantially uniform shall be divided by the number of feet fronting or abutting on said portion of the project, and the quotient shall be the rate of assessment per front foot throughout said portion of the project on which such uniformity exists.

(Emphasis added.) SDCL 9-45-32 provides assessment based on accrued benefits:

In lieu of the method of apportionment prescribed in §§ 9-45-30 and 9-45-31, it may be provided in and by the resolution determining the necessity of any street improvement that the cost thereof shall be assessed against all assessable lots and tracts of land fronting or abutting thereon or lying within one-half block or three hundred feet thereof, whichever is less, according to the benefits determined by the governing body to accrue to each of such lots and tracts from the construction of the improvement. In such event the governing body, in preparing, considering, and hearing objections to the assessment roll as provided in chapter 9-43, shall make such investigation as may be necessary and shall find and determine the amount in which each such lot and tract will be especially benefited by the construction of the improvement, and shall assess against each such lot and tract such amount, not exceeding said benefit as shall be necessary to pay its just portion of the total cost of the work to be assessed.

(Emphasis added.)

[¶ 9.] The City primarily used the front foot method of apportionment in SDCL 9-45-30. On appeal, the City argues that assessments using SDCL 9-45-30 require “no showing of special benefits.” The City relies on the different language used in the two statutes. SDCL 9-45-32 expressly addresses the need to show an “especial benefit” to the adjoining property while SDCL 9-45-30 does not. The City argues that including the special benefit requirement in SDCL 9-45-32 and excluding it in SDCL 9-45-30 indicates legislative intent not to require a showing of a special benefit if a city makes a special assessment under SDCL 9-45-30. The City's counsel advanced this argument in its brief, but acknowledged at oral argument that under both statutes a property must receive a special benefit for a special assessment to be constitutional. See Village of Norwood v. Baker, 172 U.S. 269, 279, 19 S.Ct. 187, 190-91, 43 L.Ed. 443 (1898); Hawley v. City of Hot Springs, 276 N.W.2d 704, 705 (S.D.1979). Thus, the circuit court did not err by focusing on the underlying constitutional requirement that the Petitioners receive special benefits commensurate with the amounts they were specially assessed.

Constitutional Requirements for Special Assessments

[¶ 10.] The constitutional analysis of special assessments stems from the constitutional provisions prohibiting the government from taking private property without just compensation. Norwood, 172 U.S. at 279, 19 S.Ct. at 190-91. The Fifth Amendment of the United States Constitution provides that “[n]o person shall be ... deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.” U.S. Const. amend. V. The South Dakota Constitution provides that “[p]rivate property shall not be taken for public use, or damaged, without just...