Wing v. City of Eugene

• Decision Date: 28 February 1968
• Citation: 249 Or. 367,437 P.2d 836
• Parties: Jeanne Marie WING, Executrix of the Estate of Edna E. DeNeffe, Deceased, and Sylvanus Smith, Appellants, v. CITY OF EUGENE, a Municipal Corporation of the State of Oregon, Respondent.
• Court: Oregon Supreme Court

Page 836

437 P.2d 836

249 Or. 367

Jeanne Marie WING, Executrix of the Estate of Edna E DeNeffe, Deceased, and Sylvanus Smith, Appellants, v. CITY OF EUGENE, a Municipal Corporation of the State of Oregon, Respondent.

Supreme Court of Oregon, In Banc.

Argued and Submitted Feb. 5, 1968.

Decided Feb. 28, 1968.

Stanley R. Darling, Eugene, argued the cause for appellants. With him on the briefs were Darling, Vonderheit, Hershner & Hunter, Eugene.

Herman P. Hendershott, City Atty., Eugene, argued the cause for respondent. With him on the brief was Douglas G. Combs, Asst. City Atty., Eugene.

Before PERRY, C.J., and McALLISTER, SLOAN, GOODWIN, DENECKE, HOLMAN and LANGTRY, JJ.

LANGTRY, Justice pro tem.

Plaintiffs have appealed from a circuit court decree dismissing writs of review. The decree upheld the proceedings of Eugene's city council in levying special assessments for an off-street parking facility in downtown Eugene. The area determined to be specially benefited consists of several blocks and half blocks surrounding the proposed facility.

The special assessments are levied in four zones, the closest paying the heaviest and the farthest the least assessment. Plaintiff's property is in the outer zone. Estimated cost of the facility is two million dollars. Within the assessed area are several parcels which the council found to be public parking lots operated for profit. They were not required to pay special assessments. After the proposed assessments were made, plaintiffs and another owner, whose property was described as the Fisk property, brought separate circuit court writs of review seeking to void the proposed assessments. Further consideration by the council resulted in the Fisk property being given a substantially reduced assessment proportionate to parts of it found to be used as parking lots for the public, and Fisk dropped its court proceeding.

Initially, notice of the proposed improvement and assessment required by statute was given. When the Fisk property's proposed assessment was reduced no additional notices were given. The result of Fisk's reduction is that other proposed assessments will rise substantially in proportion.

Authority for parking improvement facilities is in ORS 223.805 through 223.845, originally enacted by the 1949 Legislature and subsequently amended several times. Procedure for levying assessments for local improvements is in ORS 223.387 through 223.399. Reassessment procedure is in ORS 223.405 through 223.485. ORS 223.401 provides that review of the council's action may be by writ of review under ORS 34.010 to 34.100. ORS 34.020 provides:

'Any party to any process or proceeding before or by any inferior court, officer, or tribunal may have the decision or determination thereof reviewed for errors * * * and not otherwise * * *.'

ORS 34.040 provides that the writ shall be allowed in all cases where the functions appear to have been exercised erroneously or arbitrarily, or where jurisdiction is exceeded to the injury of some substantial right of the plaintiff.

Pursuant to the original writ and its supplements, the proceedings were returned in three parts. Included were records showing proceedings leading to the council's action, the hearings, and the determination.

Plaintiffs assign a number of errors, which in substance allege that the trial court erred in dismissing the writs because: (1) the council acted in excess of its authority when it exempted commercial public parking lots from the assessment; (2) the exemption and procedures were unconstitutional; (3) reduction of the assessment on the Fisk property was erroneous; (4) the council acted arbitrarily; and (5) the court did not allow plaintiffs to introduce evidence outside the city's returns to the writs to support plaintiffs' contentions of arbitrariness and unconstitutional procedure.

With reference to the fifth assignment, the trial court was correct in refusing to allow additional evidence. In Silva v. State, 243 Or. 187, 412 P.2d 375 (March 1966), we held that a writ of review must be tried on the record brought from the inferior court. This decision leaves unchanged, after a 1965 amendment to the writ of review statutes, the practice in this regard. See Killingsworth v. City of Portland, 93 Or. 525, 184 P. 248 (1919).

The first, second, and fourth assignments of error will be considered together. Under ORS 223.810 and 223.815, a city may establish parking facilities and acquire property therefor. Condemnation of property already being used for public parking purposes is prohibited if the owner resists. Broad powers conferred by the statutes allow planning, construction, financing and method of operation. Financing methods include:

'Special or benefit assessments * * * such assessment to be levied against property benefited in proportion to the benefit derived * * *.' ORS 223.825(2).

Parking fees and other facility income are included as a financing method. ORS 223.845 states, Inter alia, that the city may provide, and if revenue bonds are issued to finance it it must provide, that the revenues from the facility shall be disbursed for some or all of: payment of interest and retirement of bonds; payment of operating expenses; creation of a reserve account for replacements; payment in lieu of taxes; and 'Reimbursement of owners of real property for special assessments paid by them * * *.'

ORS 223.399 says that the city council may by ordinance provide additional assessment procedural requirements. The city before proceeding passed procedural ordinances. Sections 28.66--9 to 28.66--30 of the city code. Therein it was enacted that an existing public parking lot operated for profit within the assessed area is not deemed benefited and therefore exempted from assessment. Section 28.66--11(c) provides in the event such lot were to later change its land use it would at such time be proportionately specially assessed and other assessments reduced accordingly.

A levy of a special assessment for a local improvement does not offend the due process clause of the Fourteenth Amendment to the United States Constitution unless it is palpably arbitrary. Only where there is a manifest or unreasonable discrimination in fixing the benefits between parcels of property can the legislative (council's) determination be said to contravene the equal protection clause of the United States Constitution. Kansas City Southern Ry. Co. v. Road Imp. District, 266 U.S. 379, 386, 45 S.Ct. 136, 69 L.Ed. 335 (1924); Houck v. Little River District, 239 U.S. 254, 36 S.Ct. 58, 60 L.Ed. 266 (1915); Valley Farms Co. of Yonkers v. Westchester County,261 U.S. 155, 43 S.Ct. 261, 67 L.Ed. 585 (1923). These cases hold that the levying body has a wide discretion to determine whether particular property is specially benefited and may lay benefit assessments in proportion to position, frontage, area, market values or to benefits estimated by commissioners. These cases are repeatedly cited and followed in state courts, including this one. See Stanley v. City of Salem, 84 Or.Adv.Sh. 793, 427 P.2d 406 (1967). In Northern Pac. Ry Co. v. John Day Irr. Dist., 106 Or. 140, 211 P. 781 (1923), it was held, with reference to equal protection provisions of the United States and Oregon Constitutions:

'* * * When local improvements may be deemed to result in special benefits, a further classification may be made and special assessments imposed accordingly; but even in such case there is no requirement of the Federal Constitution that for every payment there must be an equal benefit * * * (the assessment will be upheld) unless the exaction is a flagrant abuse, and * * * is mere confiscation of particular property * * *.' Quoting from Houck v. Little River District, supra, 239 U.S. at 265, 36 S.Ct. at 61.

Generally, to the same effect, see Raz et al. v. City of Portland et al., 226 Or. 515, 360 P.2d 549 (1961); Northern Pacific Terminal Co. v. City of Portland, 80 F.2d 738 (9th Cir. 1935), cert. den., 297 U.S. 716, 56 S.Ct. 591, 80 L.Ed. 1002 (1936); Ladd v. Gambell, 35 Or. 393, 59 P. 113 (1899); State of Oregon v. Pirkey, 203 Or. 697, 702--703, 281 P.2d 698 (1955). 'Where * * * there is such a legislative declaration as this, as to what lands within the district will be benefited * * *,' the law is so well settled that extended discussion is not justified. Branson v. Bush, 251 U.S. 182, 40 S.Ct. 113, 64 L.Ed. 215 (quoted in Northern Pacific Terminal Co. v. City of Portland, supra). The court applied the rules recited supra.

Hauke v. Ten Brook et al., 122 Or. 485, 259 P. 908 (1927), strongly relied upon by plaintiffs for the proposition that there must be equality in levying special assessments, is not in point for there the challenge was to the city seeking to excuse some, but not all, special assessments. The assessments had long since been levied and the improvements constructed. Some assessments presumably had been paid before a disastrous fire struck the city, prompting the city government to thus try to help some who were hurt in the fire with a forgiveness amendment to the city charter for 'any or all' presently owed assessments totaling under $150,000. It is clear the subject of that decision was not the levy of special assessments.

ORS 223.825(2) quoted supra, does not specifically give the city authority to exempt any property in the district; consequently, plaintiffs assert the exemption of public parking lots is without authority. But the statute does require assessments levied to be against property benefited 'in proportion to the benefit derived.' If the city council determines that particular property or properties, by reason of use, derive no benefit, the statutory language indicates that it cannot be assessed. Saying it cannot be assessed is equivalent to saying that it is exempt from assessment, and, in such event, the authority for the exemption stems from the statute.

Plaintiffs argue that the 'exemption' if it is a classification...