Okerson v. Common Council of Hot Springs

KONENKAMP, Justice.

[¶ 1.] Deborah and Darnell Okerson petitioned the circuit court for a writ of mandamus to compel the Common Council of the City of Hot Springs, the Mayor and City Finance Officer (collectively Council) to submit to the voters a referendum on the settlement of a lawsuit concerning the construction of an addition to the golf course in the City of Hot Springs. The circuit court denied the writ. Because the stipulated facts presented to the circuit court do not support the grant of the writ, we affirm.

Background

[¶ 2.] The parties determined that no evidentiary hearing was necessary, and this matter was submitted to the circuit court on stipulated facts and exhibits. The facts before the circuit court indicate as follows:

[¶ 3.] On June 17, 2002, the Council voted to enter into an agreement with Steve and Carla Simunek for the construction of an additional nine holes to the Hot Springs golf course. On July 1, 2002, the Council amended the agreement to add Kelvin Lorenz as a party to the development and construction of the addition. Both meetings were properly called and appropriate notice was given to the public. In 2006, the City of Hot Springs commenced litigation against the Simuneks, Lorenz and other entities involved in that project. To resolve that litigation the parties entered into a stipulation for settlement. The stipulation for settlement was signed by all parties and the Attorney General. The stipulation for settlement was also approved by the court handling the litigation. On February 19, 2008, the Council approved the settlement. In the settlement, the parties were to enter a land exchange, transfer certain land, make a lump sum payment of $625,000, close a rubble pit, move the city transfer station, and adopt appropriate zoning ordinances to lift a moratorium on building permits related to the golf course. One of the stated reasons for the settlement was because “the parties are desirous of fulfilling the terms of what they understand the original agreement was for the construction of the addition Nine Holes of the Golf Course.”

[¶ 4.] Referendum petitions were filed seeking to challenge the approval of the settlement by the Council. The Council rejected the referendum petitions and subsequently amended the terms of the stipulation to reflect certain parcels of real estate in the land transfer. The amended stipulation for settlement was again approved by the parties, the Attorney General and the court. The Okersons filed a petition for a writ of mandamus seeking to compel the referendum vote.

[¶ 5.] The circuit court found that the 2002 decision to construct the additional nine holes to the golf course was a legislative act subject to referendum. However, no referendum petition was filed challenging that action. Significantly, the court found the terms of the 2002 agreement and the 2008 stipulation for settlement “consistent in all material respects” and that the stipulation for settlement “merely put into execution” the 2002 agreement. Further, the Okersons did not allege that the stipulation for settlement violated or was inconsistent with the 2002 agreement. Therefore, the circuit court determined that the referendum petitions related to a subsequent administrative action concerning the golf course settlement and was not subject to the referendum process. The circuit court denied the writ of mandamus. The Okersons appeal contending that the cir-*533euit court abused its discretion in denying mandamus relief.

Analysis and Decision

[¶ 6.] “Mandamus is a potent, but precise remedy. Its power lies in its expediency; its precision in its narrow application. It commands the fulfillment of an existing legal duty, but creates no duty itself, and acts upon no doubtful or unsettled right.” Sorrels v. Queen of Peace Hosp., 1998 SD 12, ¶ 6, 575 N.W.2d 240, 242. “To prevail in seeking a writ of mandamus, the petitioner must have a clear legal right to performance of the specific duty sought to be compelled and the respondent must have a definite legal obligation to perform that duty.” Id.; see also Woodruff v. Bd. of Com’rs for Hand County, 2007 SD 113, ¶ 3, 741 N.W.2d 746, 747. “The circuit court has discretion in granting or denying a writ of mandamus. Consequently, the standard of review on appeal is abuse of discretion.” Black Hills Cent. R. Co. v. City of Hill City, 2003 SD 152, ¶ 9, 674 N.W.2d 31, 34.

[¶ 7.] The facts, as set forth above, are those that appear in the rather limited record before the circuit court. In arguing that the circuit court abused its discretion, however, the Okersons insert in their appellate brief additional facts about the 2002 decision to develop the addition to the golf course. They assert that following the 2002 decision by the Council to proceed with the golf course construction, the Attorney General’s office declared the Council’s agreement invalid. No reasoning, explanatory facts, or evidence is provided related to that decision. These facts are introduced without adequate citation to any portion of the record and were not included in the stipulated facts the parties submitted to the circuit court. Notably, the Okersons’ petition does not allege that the original agreement was void ab initio as they now contend on appeal. The Ok-ersons also proposed no finding of fact or conclusion of law that the original agreement was void ab initio.

[¶ 8.] On appeal, the Okersons argue that because the agreement in 2002 was later ruled void by the Attorney General the action taken in 2008 was the first valid and binding decision on the construction of the golf course development by the Council. As a result, the Okersons assert that the settlement decision essentially became a “legislative” act. While this may be an interesting question, it was not the one presented to the circuit court. It is advanced here for the first time. The Okersons’ position requires this Court to speculate on the legal relationship between the parties and the validity of the underlying agreement in contravention to the stipulated facts and settled record. Given the absence of any supportive record evidence or any indication this argument was presented to the circuit court, we will not address this issue for the first time on appeal. See Argus Leader v. Hagen, 2007 SD 96, ¶ 34, 739 N.W.2d 475, 484 (holding a claim not previously raised or ruled on by the circuit court was waived in an appeal from the denial of a writ of mandamus). The Okersons’ argument suffers from the fatal flaw of being premised upon facts that are not contained within the settled record. “This Court has repeatedly instructed that the party claiming error carries the responsibility of ensuring an adequate record for review.” State v. Andrews, 2007 SD 29, ¶ 9, 730 N.W.2d 416, 420.

[¶ 9.] An analysis of the facts as contained in the record is controlled by SDCL 9-20-19. That statute provides:

Any legislative decision of a governing body is subject to the referendum process. A legislative decision is one that enacts a permanent law or lays down a rule of conduct or course of policy for *534the guidance of citizens or their officers. Any matter of a permanent or general character is a legislative decision.
No administrative decision of a governing body is subject to the referendum process, unless specifically authorized by this code. An administrative decision is one that merely puts into execution a plan already adopted by the governing body itself or by the Legislature. Supervision of a program is an administrative decision. Hiring, disciplining and setting the salaries of employees are administrative decisions.

Based on the stipulated facts, the circuit court was correct determining that the decision made in 2002 to develop the addition to the golf course and specify terms was a “legislative” decision as defined in SDCL 9-20-19. That initial decision established a “rule of conduct or course of policy for the guidance of citizens or their officers” and was a matter of “permanent character.” As such it was subject to the referendum process. However, as the circuit court recognized, no challenge was filed at that time.

[¶ 10.] Later, in 2008, the Council approved the stipulation for settlement to resolve the litigation surrounding the decision to build the nine-hole addition to the golf course. At that point, as the statute provides, the decision “merely put[] into execution a plan already adopted by the governing body itself.” The circuit court also found that the stipulation for settlement was “within the parameters of the 2002 agreement.” A comparison of these two documents supports that conclusion. The 2002 agreement set forth a plan for the private development of a nine-hole golf course to be later acquired by the City. That agreement projected an actual cost of between one and one-and-one-half million dollars. The payments were based on one-half of the increase in revenue for golf course fees. In addition, land exchanges were set forth and the establishment of a rural service district was provided. The 2008 stipulation for settlement also contemplated the acquisition of the privately built nine-hole addition to the golf course; the use of land exchanges and rural service districts; a lump sum payment of $625,000 made contingent on financing and payment by June 1, 2008; and, in the event payment was not made by that date, the annual payment reverted to one-half of the increase in revenue from golf course fees as in the 2002 agreement.

[¶ 11.] Although there are admittedly differences in the terms from the original agreement, as one would most likely expect in a settlement, the circuit court aptly described the situation:

The 2002 decision contemplated a general plan to accomplish the goal via construction by private parties, land swap and purchase. The plan, though not specific in every detail, fairly describes a rather comprehensive and reasonably specific mechanism to acquire, develop, construct, acquire and pay for the golf course.
The [t]erms of the Settlement Agreement (or as amended) when compared with the City’s 2002 decision to purchase/construct the golf course — as embodied in the July 2002 Amended Memorandum Agreement — are consistent in all material respects.
For example, paragraph 1 of the 2002 Amended Memorandum provides: “Owners agree to develop an additional 9-holes for the golf course.... When the course is developed it will be deeded by the Owners to the City with the price to be set as the actual cost for the owners developing said golf course. Said cost is projected by the architect between One and One and One-half million dollars.”
*535The settlement price is $625,000.00. Significantly, the Okersons do not claim that the 2008 Settlement Agreement (as amended) violates or is otherwise inconsistent with the provisions of the 2002 Amended Agreement.
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In this case, the 2002 Amended Memorandum does not provide a liquidated price for the golf course. However, a citizen on notice of the City’s 2002 decision would know the City intended to enter into an agreement for the construction of a golf course and pay up to 1½ million dollars for the construction. The City agreed in 2002 to a sufficiently identifiable formula to determine a payment price — along with other terms of payment and obligations of performance. The golf course construction is substantially complete. The City has determined it has an obligation to perform under the 2002 Agreement, pending lawsuit notwithstanding. The decision to settle the lawsuit within the parameters of the 2002 agreement is simply an administrative decision.

The dissent’s position was neither argued to nor considered by the trial court. Yet, even if we were to accept the dissent’s argument that the settlement agreement required payment from “a completely different revenue source,” there is a broader question presented by this appeal that has been lost between the procedural posture of this case and the lack of an adequate record for our review: Whether a decision to enter into a settlement to resolve pending litigation is referable as a legislative act.

[¶ 12.] In analyzing the administrative versus legislative distinction, we have noted that the determination is informed by the statutes, case law, and also general principles of law. Wang v. Patterson, 469 N.W.2d 577, 579 (S.D.1991). A review of those sources has led this Court to the general observation that:

The [distinction] is rooted in realism. Clearly, all municipal action cannot be subject to local review by the electorate. If government is to function there must be some area in which representative action will be final. In many situations it is difficult to determine how far the limitations should go. The courts must draw the line in these situations and in so doing must balance two interests— the protection of city government from harassment as against the benefits of direct legislation by the people.

Id. As a leading commentator has recognized, the settlement of claims in litigation has been determined not to be subject to the initiative and referendum process. 5 McQuillin, Municipal Corporations, § 16:56 (3rd ed. 2004 & Supp. 2008).

[¶ 13.] We agree that classifying a decision to settle a pending lawsuit as an administrative act not subject to the initiative or referendum process is based on a “distinction rooted in realism.” Wang, 469 N.W.2d at 579. In rejecting an initiated measure aimed at requiring the settlement of certain claims of a city against former city officials, the Minnesota Supreme Court recognized:

It is the exercising of an administrative function. We think the measure is one that calls for investigation and discretion, and, if such matters are not to be met and handled as a part of the daily routine of business of a municipality, but must be submitted to the people to make a law for each controversy that may arise, we are drifting from the ideals of representative government.
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The matter involved in the proposed ordinance is one that calls for investigation and the exercise of discretion and business judgment. It is inherently of such *536character that the voters, no matter how intelligent, cannot be expected to investigate and have access to all the information which we may assume the city council, with the aid of their attorney, acquire. Full information should be obtained and carefully considered before a conclusion is reached.

Oakman v. City of Eveleth, 163 Minn. 100, 203 N.W. 514, 517 (1925).1 See also Hous. & Redevelopment Auth. of Minneapolis v. City of Minneapolis, 293 Minn. 227, 198 N.W.2d 531, 536-37 (1972) (stating a proposed city charter amendment that would have allowed citizens to refer actions such as the settlement of lawsuits could create a “chaotic situation” in city government); Peterman v. Village of Pataskala, 122 Ohio App.3d 758, 702 N.E.2d 965, 967 (1997) (recognizing a settlement prevented a municipal referendum as it was not a “legislative action”). The dissent’s self-generated contention to allow referral of litigation settlements could create “chaotic situations” extending far beyond the facts of this case.

[¶ 14.] Consequently, we hold that the Council’s decision concerning the 2008 stipulation for settlement was an “administrative” decision on the facts presented and therefore not subject to the referendum process.

[¶ 15.] Affirmed.

[¶ 16.] ZINTER and MEIERHENRY, Justices, concur. [¶ 17.] GILBERTSON, Chief Justice, dissents. [¶ 18.] SABERS, Retired Justice, disqualified.

. It would be an untenable position if a municipality, after having the opportunity to weigh the merits of a lawsuit and confer with counsel, decided to settle litigation and that decision was determined referable. However, if the City were to ignore the benefits of settlement and proceed to a final court disposition, that judgment could not be referred. See Green Oak Twp. v. Green Oak MHC, 255 Mich.App. 235, 661 N.W.2d 243, 246 n. 5 (2003) (recognizing a referendum on a court judgment would violate separation of powers).