MUNICIPAL ATTORNEYS NEWSLETTER

Missouri Municipal Attorneys Association

1727 Southridge Drive, Jefferson City, MO 65109                            Editor Howard C. Wright 

573-635-9134, Fax: 573-635-9009                                                     Asst. Editor Ragan Wright

May 08, Issue #5/08

NEWS FOR YOU

MMAA SUMMER SEMINAR. The Missouri Municipal Attorneys Association Summer Seminar will be held at Tan-Tar-A Resort on July 18-20. Please make your reservations as soon as possible by calling 1-800-Tan-Tar-A.

CASE OUTLINES (MISSOURI)

DOCTRINE OF “GOOD FAITH” APPLIES TO MUNICIPAL AGREEMENT. Pursuant to a Missouri Department of Natural Resources (MDNR) operating permit, city of St. Joseph operated a sewage treatment plant that treated sewage from the City and sewage delivered to it from the communities of Country Club and Lake Contrary (Subscribers). The agreements provided that the Subscribers shall conform to and be governed by the City ordinances now in effect or hereafter enacted and any amendments thereto, pertaining to sewers, sewage disposal, and sewage treatment. A separate provision indicated that the agreement could also be modified through the mutual consent of the parties, EPA, and MDNR. In May of 2005, the City passed an ordinance, which required that the Subscribers perform comprehensive testing and inspection of their sewer lines ("2005 ordinance"). The 2005 ordinance was not applicable to the City’s own sewer system. It was estimated that complying with the ordinance would cost Country Club between $100,000 and $150,000 and Lake Contrary roughly $50,000, a very large sum when compared to customer revenues. Prior to the passage of the ordinance, the Lake Contrary sewer system received no complaints from the MDNR or EPA. After negotiations failed, the City filed a declaratory judgment in circuit court requesting an interpretation of the agreement, the ordinance, and a mandatory injunction ordering the Subscribers to comply. The circuit court determined that the agreement was ambiguous, took oral evidence on the ambiguity, and held that it could only be amended by mutual agreement of the parties. On appeal, the Western District held that there was no ambiguity and that there were two separate means to amend the agreement – by mutual consent or by passing an ordinance making the sewer systems of the Subscribers subject to the ordinance. The Western District however applied the doctrine of “good faith” in determining if the City was entitled to injunctive relief which is an equitable remedy. In this case, the City sought to impose by ordinance conditions that were not contemplated by Subscribers that were not applicable to the City and very expensive. Moreover, there was no evidence that showed the Subscribers' sewer systems were in poor condition. There was no evidence supporting the need for this requirement; furthermore, the City was protected by the indemnity provisions in the agreements; therefore, the City was not acting in good faith and was not entitled to a mandatory injunction since this was an equitable remedy. City of St. Joseph v. Lake Contrary Sewer District and Village of Country Club. (WD68162, 04/29/08).

     Comment Howard. Disputes between communities over inter-local agreements are usually very contentious and political. These agreements are long-term and in fact run in virtual perpetuity since it is unlikely you would remove a community from the sewerage treatment system. The idea that the parties should have contemplated this when the agreement was entered in 1979 defies logic since if thought of, it would have been dealt with when negotiating the agreement. It is very hard to anticipate something that may come up some 25 years later. This decision will make injunctions more difficult to obtain considering the court already has a lot of discretion in the granting of an injunction. It may be time to rethink our remedies.

NEW RULES. For those who have been watching the inverse condemnation battles, State ex rel., City of Blue Springs v. Nixon, (SC88475,04/29/08) is a very important case providing an analysis of when an inverse condemnation claim lies. In 1999, Damar Development Inc. and Markirk Construction (developer) received final plat approval to develop the Stonecreek Subdivision in Blue Springs (City). As required by the City, the Developer submitted a storm water drainage and storm water sewer system plan for Stonecreek that complied with industry standards. On examination of the plat and other submissions, the city engineer found that the plat met the City's development code requirements, including those relating to drainage. Although the engineer knew water would drain downhill across some yards when it rained, he did not believe it would cause excessive water to run through the properties. In 2000, Shawn and Jennifer Stevens (owners) bought property in the Stonecreek Subdivision and began building their home. Their builder, who was independent of the developer, advised them not to put in a walkout basement because it would change the area's natural drainage and would cause drainage problems from storm water runoff when it rained. The owners built a retaining wall and the walkout basement anyway, which created a channel in which storm water flowing down the hill would run. When it rained hard, storm water runoff rendered portions of their yard unusable, and they lost topsoil. The owners sued the developer, claiming the developer was negligent and had misrepresented the storm water runoff and drainage issues, and also sued the City alleging the City was negligent in approving the plat without requiring additional provisions for rainwater runoff. They asserted a claim against the City that the storm water runoff was an inverse condemnation of their property. The City sought a writ of prohibition from the Missouri Supreme Court to require Judge Nixon to grant its motion for summary judgment on claims brought against the City by owners. The Court issued its preliminary writ of prohibition which it made absolute upon issuing its opinion. The Court ruled that mere approval of a plat in this case by the City did not state a cause of action under an inverse condemnation theory. An inverse condemnation action will lie in two situations. First, when by mistake or design the public authority actually appropriates the land for its use. Second, as a direct consequence of the improvement the government authority actually appropriates the property. The Court also stated in obiter dictum that an inverse condemnation action did not run with the land; therefore, successor landowners who buy the property with the condition do not have a cause of action.

     Comment Howard. The examples cited by the Court are perhaps more instructive than the black letter law laid down by the Court. Under the second test, a MoDOT case was cited where MoDOT had liability when the public improvement design flooded during “normal rainfall limits.” What is a “normal” rainfall that would exceed the design capacity of the public improvement? Is this a 10-, 25-, 50-, or 100-year rain event? Does this vary with the type of public improvement? For example, you cannot prevent inflow and infiltration (I&I) from entering sanitary sewer systems. At some point, I&I from the rainfall event will cause the sewer system to super charge thereby causing sewage to back up and enter private property. It is not economical or practical to design sewer systems with capacity for even a 10-year rainfall event, while it may be practical to design storm sewers to carry much larger rainfall events. I have a problem in understanding the difference between the “design” of a public improvement described in the first test and an appropriation “as the direct consequence of the improvement” in the second test. Seems like these are the same. The comment about inverse condemnation actions not running with the land to successor owners is extremely useful.

CITY CAN BAN SIGN UNDER STATE LAW. Ad Trend, Inc., sought a municipal sign permit for the construction of a new billboard in Platte City (City). While Ad Trend's application for a permit was pending, the City amended its zoning ordinance to prohibit new billboards of the type Ad Trend intended to construct. The City denied the permit. Ad Trend sought a declaratory judgment declaring that the City's zoning ordinance violated Missouri’s Billboard Act and that it impaired Ad Trend's vested rights. Ad Trend also sought a writ of mandamus forcing the codes officer to issue the permit. The City requested and the trial court granted a motion for summary judgment on all counts. Ad Trend now appealed to the Western District which affirmed the judgment. The legislature provided cities and counties with the unqualified ability to regulate the height, size, lighting, and spacing of billboards; therefore, it impliedly provided the authority to pass a total ban on certain signs. The ordinance in question regulates the size and spacing of signs in the City's jurisdiction. The ordinance was interpreted to mean that the maximum area of a sign is no greater than zero and the minimum spacing between signs is infinite. State of Missouri, ex rel., Ad Trend, Inc. v. City of Platte City, (WD68559, 05/15/08).

BOARD DID NOT ABUSE ITS DISCRETION IN DENIAL OF VARIANCE. Property owner (owner) sought a variance based on practical difficulties in order to construct a new garage that would violate the setback requirements of the city of Jennings by 10 feet. The Board of Adjustment (Board) heard evidence and rendered its decision denying the request for a variance and the owner appealed to the circuit court. The circuit court reversed the decision of the Board on the grounds that the Board’s decision was discretionary and it could have reasonably granted the variance which was supported by substantial evidence. On appeal, the Eastern District held that the decision of the Board would be upheld unless the Board abused its discretion. The Board’s decision to deny the request for a variance was upheld. Baumer v. City of Jennings, (ED90038, 03/11/08).

     Comment Howard. While this is pretty much a garden variety board of adjustment case the opinion does a very good job of stating the law. The opinion also discusses the difference between a use variance and a nonuse variance, noting that Missouri follows the New York model.

COLA INCREASE IS PART OF SALARY. Cost of living increases (COLA) granted to previous prosecutor could not be rolled back for new prosecutor on the theory that these were personal adjustments. State law mandates COLAs therefore the County’s commission did not have any discretion in whether or not they were granted. Goodwin v. Carroll County, ex rel., (WD68116, 04/22/08).

     Comment Howard. This case has a good discussion of the nature of COLA increases.

OFF ROAD BIKE NOT A MOTOR VEHICLE. Mitchell was riding an “off the road” bike while intoxicated on private property. The bike was not licensed nor could it be licensed for use on the highways. The director of revenue revoked Mitchell’s driver’s license and Mitchell appealed to the circuit court which reversed the director’s revocation. The director appealed to the Southern District which concluded that for purposes of section 302.505, the motorcycle that the petitioner was riding did not fit the category of a motor vehicle as that term is defined in the applicable definition section, section 302.010(9) and (23), in that it was not designed primarily for use on highways nor was it used on a highway by petitioner. The judgment of the trial court rescinding the suspension of petitioner's driver's license was affirmed. Mitchell v. Director of Revenue, (28193, 04/16/08).

RIGHT TO PROTEST NOT RIPE IN ZONING CASE. Citizen who has right of protest did not have standing to challenge denial of his right to protest conditional use permit because the matter was not ripe until after the commission ruled on the zoning matter. Schultz v. Warren County, (ED89534, 04/15/08).

CASE OUTLINES (FEDERAL)

DRUG POLICY FOR STUDENT GRANTS UPHELD. For those following drug policy issues, you may want to look at Students for Sensible Drug Policy Foundation v. Spellings, (8th Cir., #07-1159, 04/29/07). In this case, a student advocacy group brought action against the Department of Education, challenging constitutionality of statute suspending financial aid eligibility for students convicted of drug-related offenses. The 8th Circuit held that (1) statute demonstrated congressional intent that penalties were civil in nature, and (2) statute was not so punitive in purpose or effect as to transform it into a criminal penalty.

REASONABLE SUSPICION NEEDED TO ASK FOR IDENTIFICATION. Sometimes police officers ask for identification when there is no reasonable suspicion to believe a crime has been committed. When the person being asked does not respect the officers “authoritii,” the person refusing is arrested. Stufflebeam v. Harris, (8th Cir. 06-406, 04/04/08) answers the question of whether or not the arrest violates the civil rights of the person arrested. Stufflebeam's complaint alleged that he “was not suspected of any criminal activity” and was arrested “simply because he would not identify himself.” Nothing in the record suggests any obstruction other than Stufflebeam's refusal to identify himself. Thus, the primary question is whether Arkansas law permits a police officer to arrest a person for refusing to identify himself when he/she is not suspected of other criminal activity and his/her identification is not needed to protect officer safety or to resolve whatever reasonable suspicions prompted the officer to initiate an ongoing traffic stop or Terry stop. The 8th Circuit concluded it does not.

     Comment Howard: This case would be useful when the police or a citizen calls and asks about what you are going to do about that strange person aimlessly wondering about the neighborhood who has a long beard who looks like a homeless person.

 LEGISLATION, NEWS, AND OTHER MATTERS

STACKING. Recently a judgment was entered against the city of Iberia for exceeding the one-half of 1 percent amount in the capital improvement sales tax statute. In this case, the citizens of Iberia had voted for two separate sales taxes that when added together exceeded one-half of 1 percent (commonly referred to as stacking). A copy of the judgment can be obtained from the MML. Tom Burcham who brought the lawsuit, failed in his attempt to get the General Assembly to amend state law to authorize attorney fees and class actions in such cases. He recently tried to get the high ground through a news release stating that the $20,000 attorney’s fee he obtained in the Iberia case would be donated to charities designated by Mr. Burcham and his wife. He now has sent letters to some of the cities where he is litigating, suggesting that they now need to reconsider their position in light of the Iberia case.

TALK TO US

Joseph Gall from Independence writes, “Howard, I saw the reference to the liquidated damages case in the MMAA Newsletter. There is case law in Missouri stating that "in a public works project, the public entity may recover liquidated damages solely upon proof of a violation of the contract [regarding completion date] (emphasis added)." Taos Construction Company, Inc. v. Penzel Construction Co., Inc., 750 S.W.2d 522, 526 (Mo. App. 1988). See also Sides Construction Company, 581 S.W.2d @ 447. I think that is still good law and that would seem to eliminate the typical burden of proof in a non-public contract.” Joe is right on point. Thank you Joe.

READING MATERIAL

Mobar cle on local government. MoBar CLE has published a 2008 supplement to Missouri Local Government Law. The supplement also includes a revised and expanded chapter on municipal court proceedings with practical lists and other helpful information. The two-volume deskbook, along with sample forms on CD-ROM and the 2008 supplement, sells for $215. The 2008 supplement alone sells for $65. To purchase the book or for more information follow the link to: http://www.legalspan.com/mobar/publications.asp?UGUID=&CategoryID=&ItemID=

20031204-163149-74544. Or call toll-free at 888-253-6013.

REDEVELOPMENT: PLANNING, LAW, AND PROJECT IMPLEMENTATION is now available from the ABA at a price of $89.95. The book explores the complex process of development for single use or a mix of uses, and addresses important considerations in redevelopment planning, federal, state, and local laws, and implementing redevelopment ideas. ABA members may purchase this at www.ababooks.org.

BROWNFIELD’S REPORT. If you missed the recent IMLA conference call on Brownfield’s there is a report available on this subject titled “State Programs and Policies to Encourage Local Government Actions to Address Brownfield’s: How State Liability Protections, Eminent Domain Reforms, and Cost Recovery Authority can Spur Local Government Action to Acquire and Redevelop Brownfields.” The report is available at: ttp://www.nemw.org/StateprogpublicAgency

action.pdf.