Gregg v. Whitefish1
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Ted 0. Lympus, District Judge
Department No. 1
Flathead County Justice Center
920 South Main Street
Kalispell, Montana 59901
Telephone: (406) 758-5667
IN THE DISTRICT COURT OF HE ELEVENTH JUDICIAL DISTRICT OF THE
STATE OF MONTANA, IN AND FOR THE COUNTY OF FLATHEPIJ
JP.MES R. GREGG, eL' al.,
Cause No. DV-99-037A
Plaintiffs,
-vs-
ORDER AND RATIONALE
THE WHITEFISH CITY COUNCIL, and
the CITY OF WHITEFISH,
Defendant. )
This matter is before the Court on Count I of Plaintiffs' Amended
Petition and Complaint, in which Plaintiffs have requested the Court to
"determine that as a matter of law the protests filed by Plaintiffs were
sufficient t0 defeat annexation_. The parties have, in lieu of an
evidentiary hearing, presented to the Court their Stipulations of Issues
of Law, Facts, and Evidence relevant thereto, and have subsequently
filed their respective Briefs and Response Briefs in support of their
respective positions. Thereafter, having read and considered same and
being thereby now fully advised in the premises, the Court enters the
following:
Plaintiffs' request for relief in Count I is DENIED.Defendant
City of Whitefish had the right to invalidate sufficient numbers of
protests to allow the City to continue with annexation.
'RATIONALE
During the last four months of 1998, Defendant City of Whitefish
began annexation proceedings with respect to six neighborhoods
contiguous to the existing City boundaries. Pursuant to Section 7-2-
4707, M.C.A., the City adopted a resolution of intention to annex, then
published notice and set the required time within which to accept
written protests. A determination was made by the City that one of the
six neighborhoods has successfully protested annexation under Section 7-
2-4710, M.C.A., and annexation with respect to that neighborhood was
discontinued.
ORDER AND RATIONALE -1-
1 The remaining five neighborhoods were annexed pursuant to Ordinance
No. 98-11. Section 7-2-4710, M.C.A., provides in part:
2
If a majority of the real property owners
3 disapprove of the proposed annexation in writing,
further proceedings under this part relating to the
4 area or any part of the area proposed to be annexed
may not be considered or acted upon by the
5 governing body on its own initiative, without
petition, for a period of 1 year from the date of
6 disa-c-croval.
7 On their face, all six neighborhoods had written protests from
sufficient numbers of real property owners to successfully protest or
8 stop annexation. However, the City, after tabulating all protests,
invalidated those received from owners which the City determined had
9 previously waived the right to protest. The City considered three
different types of waiver of right to protest:
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1. Waiver of protest agreements signed by the current property
11 owners.
12 2. Waiver of protest agreements signed by the current property
owners' predecessors in interest and recorded.
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3. Implied consent- to annexation based on the property owners'
14 failure to give notice to disconnect from City utility
services and continued use as a consent to annexation.
15
Prior to 1966, the City supplied utility services to property
16 owners outside the City boundaries without regard to annexation. On
February 21, 1966, the City adopted a policy in which utility customers
17 outside the City boundaries would have to sign a waiver of protest
agreement prior to being allowed such services. Said agreements were
18 recorded and clearly provided that they ran with the land and were
binding upon future purchasers.
19
Both parties agree, although they have not so stipulated, that the
20 waiver of protest agreements signed by current owners are valid
agreements and that protests received from those owners should be
21 considered invalid. However, this determination of invalidity does not,
in and of itself, reduce the number of protests to a level which would
22 allow the City to proceed with annexation in any of the five
neighborhoods. The actual agreed -upon protest numbers for each of the
23 five neighborhoods are set forth below.
24 The City's utility policy created a second type of waiver of
protest, that being one signed by the former owner of a property who
25 subsequently transferred the property and the current owner is not the
owner who actually signed the waiver. The waiver of protest agreements
26 used by the City since 1966 have all been recorded, appear in the chain
of title to the subject property and contain the following language:
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28 ORDER AND RATIONALE -2-
1' We do hereby further agree that this covenant shall
run to, with, and be binding upon the title of the
2 said real property, and shall be binding upon our
heirs, assigns, successors in interest, purchasers,
3 and anv and all subsecuent holders or owners of the
above -described real property.
4
Clearly, such waivers are covenants running with the land which,
5 when signed by the original owners, were for the direct benefit of the
respective properties. Section 70-17-203, M.C.A. The properties
6 received water and/or sewer services without the installation of
expensive wells and/or septic systems and at considerable expense to the
7 City.
8 A person's right to protest under Section 7-2-4710, M.C.A., is
based upon the ownership of real property and once limited or waived and
9 properly recorded, such limitation or waiver would be binding upon all
subsequent owners. Section 7-13-4314, M.C.A., provides that a person
10 living outside of an incorporated city:
11 ...may be required by the city or town, as a
condition to initiate such service, to consent to
12 annexation of the tract of property served by the
city or town. The consent to annexation is limited
13 to that tract or -oarcel...being serviced by the
water or sewer service. (emphasis added)
14
Again, the right to protest is derived from the ownership of land
15 and a waiver, properly recorded so as to put a subsequent purchaser on
notice, runs with the land and restricts any future right based upon
16 that parcel. By expressly limiting the consent to that tract or parcel
receiving service and to give effect to a covenant running with the
17 land, Montana has, in effect,, provided for the recordation of waivers'
that are binding upon subsequent purchasers.
18
The third type of waiver/consent relied upon by the City was an
19 implied consent to annexation by various `property owners who failed to
indicate an intention to discontinue use of City utility services.
20 Numerous City utility customers in the areas proposed to be annexed were
not subject to the waiver of protest agreements required by the City
21 after 1966, because they were receiving utilities prior to that date.
22 On September 21, 1998, the City, relying upon an Attorney General's
Opinion (46 Op. Att'y Gen. No. 12 (1995), by Resolution 98-43, adopted
23 a utility rule. The Rule requires that the City „either obtain a
property, owner's consent to annexation or require the owner to
24 discontinue utility service. The rule further provides:
25 If, however, a property owner has not, within ten`
(10) days, made firm written arrangements to;
26 discontinue sewer and water service, then the City
shall be entitled to treat the property owner as
27 having consented to annexation of his or her
28 ORDER AND RATIONALE -3-
I property upon the expiration of such 10-day period.
The failure by the property owner to respond in
2 writing within ten (10) days shall entitle the City
to treat the property owner as having consented
3 upon the expiration of such 10-day period.
4 On October 5, 1998, the City mailed to all property owners within
the annexation areas a letter explaining the annexation process and
5 informing utility users that they would also receive a request that each
consent to annexation. On October 15, 1998, the City mailed a second
6 notice explaining the new utility rule and that, unless a property owner
made firm arrangements to discontinue utility service, continued receipt
7 thereof would indicate consent to annexation. The 10-day response
period was extended and on December 17, 1998, all _protests received from
8 property owners who had failed to respond yet continued to receive
utility services were invalidated.
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Section 7-13-4314, M.C.A., and the 1995 Attorney General's Opinion
10 both support Defendant's position that consent to annexation may be
required for initial and continued utility service and neither
11 specifically requires any special form of consent such as express,
written or implied. Clearly, Montana has long recognized that consent
12 may be implied and that implied consent is valid consent.
13 Section 28-2-503, M.C.P_., recognizes implied acceptance or consent
and provides as follows:
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(2) A voluntary acceptance of the benefit of a
15 transaction is eauivalent to a consent to all the
obliaations arising from it, so far as the facts
16 are known or ought to be known to the person
accepting. (emphasis added)
17
As required by Section 7-1-4129, M.C.A., the City mailed notices to
18 the affected property owners on both October 5, and 15, 1998, and on
December 15, 1998, it invalidated protests of those owners who consented
19 to annexation by continuing to receive utilities from the City.
20 Once all forms of invalidated protests were deleted from those
received;, Plaintiffs in all five neighborhoods had failed to file`
21 written protests by a majority of real property owners (able to
protest), as required. The annexation process could therefore proceed.
22
The actual numbers in all five neighborhoods are as follows:
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Designated No. of Total Remaining after. Percentage of
24 Neiahborhood Owners Protests invalidation property owners
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Colorado/Texas 58 38 6 100
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Second Street
27 Armory 97 64 6 6%
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I Lake Park
Patton 35 28 8 23%
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South Central 275 169 45 160
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Nelson Lane 10 9 6 300
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The City has further challenged the standing of certain Plaintiffs,
5 taking the position that any Plaintiff who had waived the right to
protest or had consented to annexation, would not have standing to
6 participate in this lawsuit. Section 7-2-4741, M.C.A., provides as
follows:
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Within_ 30 days of the passage of an annexation
8 ordinance under authority of this part, either a
majority of the real property owners of the area to
9 be annexed or the owners of more than 75% in
assessed valuation of the real estate in the area
10 who believe that they will suffer material injury
by reason of the failure of the municipal governing
11 body to comply with the procedures set forth in
this part or to meet the requirements set forth in
12 7-2-4734 and 7-2-4735, as applied to their
property, may file a petition in the district court
13 seeking review of the action of the governing body.
14 The right to protest under Section 7-2-4710, M.C.A., and the right
for judicial review for failure of the governing body to comply with the
15 statutory procedures and requirements under Section 7-2-4741, M.C.A.,
are separate and distinct rights. Section 7-2-4710, M.C.A., provides
16 that a majority of the real property owners who validly protest may stop
or block annexation. Section 7-2-4741, M.C.A., is available after
17 annexation and allows a majority of the property owners to seek judicial
review to force or compel the municipal governing body to comply with
18 statutory procedures. The relief available to Plaintiffs is controlled
by Section 7-2-4742, M.C.A., and appears to be limited to forcing
19 conformance by the governing body. `Since the rights are separate and
distinct, clearly, failure to exercise the right to protest and a waiver
20 of the right to ,protest, would not waive any property owner's right to
seek judicial review.
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Accordingly, Count I of Plaintiffs' Petition for Review and
22 Complaint is dismissed with prejudice and it is now appropriate to
proceed with determination of Count II.
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DATED this 31st day of July, 2000. —�
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Ted 0. Lympus, Dc Judge
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c: William E. Astle, Esq.
27 John M. Phelps, Esq.
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