Wood v. City of Lewiston

• Decision Date: 27 December 2002
• Docket Number: No. 26591.,26591.
• Citation: 138 Idaho 218,61 P.3d 575
• Parties: Burton C. WOOD, a married man dealing with his sole and separate property, Doug Marsh and Lorna Marsh, husband and wife, Robert Curry, Bruce Sweeney Limited Partnership, and Seubert Excavators, Inc., a corporation, Plaintiffs-Appellants, v. CITY OF LEWISTON, Idaho, a municipal corporation, Defendant-Respondent.
• Court: Idaho Supreme Court

61 P.3d 575

138 Idaho 218

Burton C. WOOD, a married man dealing with his sole and separate property, Doug Marsh and Lorna Marsh, husband and wife, Robert Curry, Bruce Sweeney Limited Partnership, and Seubert Excavators, Inc., a corporation, Plaintiffs-Appellants, v. CITY OF LEWISTON, Idaho, a municipal corporation, Defendant-Respondent.

No. 26591.

Supreme Court of Idaho, Lewiston, October, 2002, Term.

December 27, 2002.

Radakovich Law Office, Lewiston, for appellants. Danny J. Radakovich argued.

Don L. Roberts, City Attorney for the City of Lewiston, for respondent.

TROUT, Chief Justice.

Property owners within a Local Improvement District (LID) in Lewiston appeal from a district court order affirming the City Council's creation of the LID and modifying the Final Assessment Roll. This Court reverses in part and remands the case to the district court with instructions to (1) order appellant, the Sweeney Limited Partnership, to remain in the case and (2) remand the case to the City for reassessment.

I. FACTUAL AND PROCEDURAL BACKGROUND

The City Council of the City of Lewiston (City Council) created LID 97-2, the "Red Rock LID," by ordinance adopted February 23, 1998, and approved the Final Assessment Roll by ordinance adopted September 13, 1999. The Final Assessment Roll identifies fourteen parcels to be assessed $25,281.00 each in order to finance the construction of a water main system.

Appellants are five landowners who together own eight of the parcels assessed. These landowners include Burton C. Wood (Wood), Doug and Lorna Marsh (the Marshes), Robert Curry (Curry), Seubert Excavators, and the Bruce Sweeney Limited Partnership (the Sweeney Partnership). Wood owns two adjacent parcels, one 1.2 acres and the other 1.7 acres, on which two businesses operate; the Marshes own a single parcel of .61 acres on which they operate a gas station and convenience store; Curry owns two adjacent parcels, one 2.1 acres and the other 10 acres, on which he operates a utility construction company; Seubert Excavators owns a single parcel of 6.7 acres which was formerly used as a rock quarry; and the Sweeney Partnership owns two parcels, one 1.2 acres and the other .87 acres.

The City of Lewiston annexed the Red Rock area in the late 1960's or early 1970's. Prior to the installation of the water system at issue, this area received water from two sources: the privately owned Red Rock Land and Water system provided domestic water fed by a spring and the Hatwai Irrigation District pumped water from the Clearwater River for purposes of irrigation and fire protection.

Questions regarding the sufficiency of the two Red Rock water sources date back to the 1980's. At that time, the Red Rock Land and Water system experienced insufficient flows prompting the City to make an emergency hook-up of the Red Rock Land and Water system with the City system. Subsequently, in 1993 and 1994, Bruce Sweeney, of the appellant Sweeney Partnership, asked the City to consider ways to improve the water system in the Red Rock area. Sweeney was concerned the existing water was not adequate to provide sufficient fire protection and precluded expansion of a business operating on his land. Moreover, in 1993 the City learned the owner of the Red Rock Land and Water system wanted to cease business operations.

In response to these concerns, the City began to consider ways to address the Red Rock area's water problems. In 1995, the City paid the engineering firm of Thomas, Dean & Hoskins to complete a hydraulic study for the area, and, sometime prior to 1996, the City became interested in providing a new system of domestic water and fire protection to the Red Rock area.

In the process of evaluating its options, the City considered a number of water system designs for the area and completed at least two applications for grant funding from the Idaho Community Development Block Grant program. A successful 1997 application became the blueprint for the new water system, both in terms of project design as well as proposed financing. In terms of design, the City's application described a water main system consisting of 1.5 miles of looped ten and twelve inch main system providing 3,250 gallons of water per minute. In terms of financing, the City sought $450,000 in grant money and described a contribution of $367,935 from a future LID.

On December 9, 1997, the City wrote letters to Red Rock area property owners describing the proposed water system improvements and assessment financing and announcing a public hearing on the matter to be held January 5, 1998. These letters explained the property owners would be responsible for approximately $360,000 of the project and each tax parcel would be assessed approximately $25,000; however, such numbers were approximations subject to change depending on final construction costs.

On December 15, 1997, the City passed two resolutions for the purpose of creating the Red Rock LID. The first, Resolution 97-93, initiated the process of forming the LID. Pursuant to I.C. § 50-1706, Resolution 97-93 describes the proposed LID's boundaries and improvements. The second resolution, Resolution 97-110, is more detailed as required under I.C. § 50-1706, in order to give the public appropriate notice of the City's proposed actions. Resolution 97-110 again provides a description of the proposed LID's boundaries and improvements but also includes more information regarding the assessment itself and opportunities for public comment.

Resolution 97-110 estimates the total cost of the improvements to be $1,070,352, of which $367,935 would be covered by assessments. In terms of apportioning the total assessment, the Resolution is slightly confusing, both describing a "per lot" as well as a "per owner" division of costs. First, Resolution 97-110 provides the assessments will be shared among property owners. The Resolution states, "Each such lot and parcel of land shall be assessed for a portion of the costs and expenses of LID 97-2 in proportion to the benefits derived to each such lot and parcel of land." (Emphasis added). However, the Resolution also provides, "The City Council proposes each lot and parcel of land shall be benefited equally by the improved water system and that expenses and cost of LID 97-2 shall be equally divided among the 17 property owners." (Emphasis added).

As for opportunities for comment, Resolution 97-110 describes the time and place for the public hearing on the creation of the Red Rock LID and provides for written comments to be filed with the City Clerk no later than 5:00 p.m. on January 5, 1998, the date of and time of the public hearing. At the public hearing, the City Manager reported that no written comments on the proposed LID had been received. However, Councilman Wallace reported property owner, Doug Marsh, had contacted her and indicated that the LID assessment would likely destroy his business.

Despite these concerns, on February 23, 1998, the City passed Ordinance 4210, creating and establishing the Red Rock LID. Thereafter, the City received a bid for constructing the system which was considerably lower than the anticipated costs. In addition, over the course of construction, some changes to the original design were made.

On July 19, 1999, the City Council adopted Resolution 99-54, which set the public hearing on the Final Assessment Roll for August 9, 1999. At this second hearing, appellants Wood and Curry appeared and appellants Marsh and Seubert Excavators sent notices of objection. Nonetheless, on September 13, 1999, the City Council enacted Ordinance 4247 approving the Final Assessment Roll. Ordinance 4247 states the City Council had considered all relevant protests and objections.

On October 8, 1999, the appellants filed a timely Notice of Appeal in the Second Judicial District court protesting Final Assessment Roll established by the City. Pursuant to I.C. § 50-1718, such an appeal does not require a pleading and none was offered. Over the first two days of trial, appellants presented their case in chief. Thereafter, one of the appellants, the Sweeney Partnership, sought to withdraw from the proceedings and presented the court with a prepared Order Allowing Withdrawal of Appeal. The Court did not sign the Order but delayed ruling on the requested order until the trial was completed.

On April 21, 2000, the district judge issued Findings of Fact, Conclusions of Law, and an Order upholding the formation of the LID and ordering the City to modify the final assessment amount from $25,281 to $21,413 to account for work done outside the LID boundaries. The property owners (Owners) then filed a timely Notice of Appeal to this Court.

II. STANDARD OF REVIEW

The Idaho Rules of Civil Procedure provide, the "standards of review applicable to judicial review of . . . local government actions shall be as provided by statute." I.R.C.P. 84(a). The statute at issue here, the "Local Improvement District Code," provides for direct appeal of assessments to the district court where the case is tried "as in the case of equitable causes." I.C. § 50-1718. On appeal to the district court, the district court conducts a de novo review of the city's actions under the LID authority, applying a presumption of validity to the city council's actions. Simmons v. City of Moscow, 111 Idaho 14, 19, 720 P.2d 197, 202 (1986). "Only `clear proof' of great force will warrant a conclusion that an assessment is erroneous so as to overcome the presumption of validity." Id. (citing 14 McQuillin, Municipal Corporations, 3d Ed. (1970), § 38.186). This deferential approach reflects the legislative nature of municipal decisions to conduct improvements and impose taxes. Nonetheless, even while the courts presume the assessments are valid, because levying such assessments are in derogation of private property rights, courts require strict compliance with mandatory statutory procedures. 13 McQuillin, Municipal Corporations, 3d E...