Balock v. Town of Melstone

No. 14650 IN THE SUPREME COURT OF THE STATE OF MONTANA 1980 JOHN BALOCK, JR., and HEATHER J. BALOCK, Plaintiffs and Appellants, THE TOWN OF MELSTONE, MONTANA et al., MARGAEET REIGHARD , ROBERT HAGSTROM, and MUSSELSHELL COUNTY, Defendants and Respondents. Appeal from: District Court of the Fourteenth Judicial District, Honorable Nat Allen, Judge presiding. Counsel of Record: For Appellants: K. Robert Foster, Lewistown, Montana For Respondents: John L. Pratt, County Attorney, Roundup, Montana Submitted on briefs: January 16, 1980 Decided : FEB 2 $ 1-@j Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d t h e O p i n i o n o f t h e Court. Appellants f i l e d t h i s a c t i o n i n t h e D i s t r i c t Court of t h e F o u r t e e n t h J u d i c i a l D i s t r i c t i n M u s s e l s h e l l County. ~ p - p e l l a n t s requested t h e D i s t r i c t Court t o e n j o i n t h e respondents from t a x i n g c e r t a i n p r o p e r t y t h e y owned a t t h e r a t e s p r e v a i l i n g f o r p r o p e r t y l o c a t e d i n t h e town o f M e l s t o n e and t o r e f u n d M e l s t o n e c i t y t a x e s on t h e p r o p e r t y p a i d u n d e r p r o t e s t . The Honorable Nat A l l e n h e a r d t h e case s i t t i n g w i t h o u t a j u r y . J u d g e A l l e n c o n c l u d e d t h a t a p p e l l a n t s ' p r o p e r t y was w i t h i n t h e b o u n d a r i e s o f t h e C i t y o f M e l s t o n e and d e n i e d t h e r e l i e f p r a y e d f o r by a p p e l l a n t s . This appeal followed. The town o f M e l s t o n e i n c o r p o r a t e d i n 1913. The a r e a i n c l u d e d i n t h e o r i g i n a l p l a t o f t h e town i s shown on t h e map, a t t a c h e d t o t h i s o p i n i o n f o r c l a r i f i c a t i o n . The a r e a o r i g i n a l l y i n c o r p o r a t e d a s t h e town o f M e l s t o n e i s e n c l o s e d by t h e d o t t e d l i n e o n t h e map. Over t h e y e a r s , t h e t a x a s s e s s o r a p p a r e n t l y o n l y t a x e d t h e s e c t i o n s o f M e l s t o n e i n c l u d e d i n t h e a r e a marked o f f i n t o l o t s and b l o c k s a s i n s i d e t h e C i t y o f M e l s t o n e . Prior t o 1976, t h e map used by t h e County A s s e s s o r t o d e t e r m i n e i f a p i e c e o f p r o p e r t y was i n t h e C i t y o f M e l s t o n e f o r t a x p u r p o s e s i n c l u d e d o n l y t h e a r e a marked o f f i n l o t s and blocks. The a r e a i s marked by t h e d o u b l e s o l i d l i n e on t h e a t t a c h e d map. I n 1973 a p p e l l a n t s J o h n and H e a t h e r Balock p u r c h a s e d a p i e c e o f p r o p e r t y i n s i d e t h e c i t y l i m i t s o f M e l s t o n e as i n c l u d e d i n t h e o r i g i n a l p l a t o f t h e town b u t o u t s i d e t h e a r e a t r a d i t i o n a l l y c o n s i d e r e d i n s i d e Melsone by t h e County Assessor f o r t a x purposes. The a p p r o x i m a t e l o c a t i o n o f t h e p r o p e r t y i s marked by x ' s o n t h e a t t a c h e d map. Before purchasing t h e property, M r . Balock went t o t h e County A s s e s s o r ' s O f f i c e t o see i f t h e p r o p e r t y was t a x e d a s b e i n g w i t h i n t h e C i t y of Melstone. The M u s s e l s h e l l County A s s e s - sor told Mr. Balock t h a t t h e p r o p e r t y was o u t s i d e t h e c i t y l i m i t s of Melstone. The County A s s e s s o r a l s o showed M r . Balock t h e map o f M e l s t o n e t h e n b e i n g u s e d t o d e t e r m i n e i f p r o p e r t y was w i t h i n t h e c i t y l i m i t s . T h a t map o n l y i n c l u d e d t h e p a r t o f M e l s t o n e t h a t had been marked o f f i n t o s t r e e t s and blocks. The map d i d n o t i n c l u d e t h e p r o p e r t y M r . Balock w a s about t o purchase. I n 1 9 7 6 , t h e town o f M e l s t o n e r e a l i z e d t h a t a p o r t i o n of t h e a r e a included i n t h e o r i g i n a l p l a t of t h e c i t y w a s n o t being taxed a s a p a r t of t h e c i t y . The County Commissioners decided t o r e c t i f y t h e s i t u a t i o n . The 1976 t a x a s s e s s m e n t n o t i c e s r a i s e d t h e r a t e s of t h e a r e a i n s i d e t h e o r i g i n a l town p l a t b u t n o t p r e v i o u s l y t a x e d a t c i t y r a t e s t o t h e c i t y r a t e s . T h i s i n c l u d e d t h e p r o p e r t y p u r c h a s e d by t h e B a l o c k s i n 1973. I n c l u d i n g t h e p r o p e r t y i n t h e c i t y f o r t a x p u r p o s e s c a u s e d t h e t a x e s on t h e p r o p e r t y t o g o from $700 t o $800 p e r y e a r t o a p p r o x i m a t e l y $1,500 p e r y e a r . The B a l o c k s p a i d t h e i r i n c r e a s e d t a x e s under p r o t e s t and f i l e d a n a p p e a l w i t h t h e S t a t e Tax A p p e a l s Board. The A p p e a l s Board d i s m i s s e d t h e c a s e f o r lack of j u r i s d i c t i o n . The B a l o c k s t h e n i n i t i a t e d t h i s s u i t i n D i s t r i c t Court. A p p e l l a n t s r a i s e t h e f o l l o w i n g i s s u e s on a p p e a l : Did t h e D i s t r i c t C o u r t err i n c o n c l u d i n g t h e B a l o c k s ' p r o p e r t y was w i t h i n t h e town o f M e l s t o n e f o r t a x p u r p o s e s ? Did t h e ~ i s t r i c C o u r t err i n f a i l i n g t o f i n d t h a t t h e t r e q u i r e d p r o c e d u r e s f o r r e a s s e s s m e n t w e r e n o t f o l l o w e d by t h e town o f M e l s t o n e ? The d o c t r i n e o f a c q u i e s c e n c e i s a l o n g e s t a b l i s h e d t e n a n t o f common law. See 2 McQuillin, Municipal Corporations 5 7 . 0 9 , pp. 294-297 (3rd rev. ed. 1979). The b a s i c p r e m i s e o f t h e d o c t r i n e i s t h a t l o n g a c q u i e s c e n c e between p a r t i e s a s t o municipal boundaries e v e n t u a l l y e s t a b l i s h e s those boundaries. 2 M c Q u i l l i n , s u p r a a t 294. The r a t i o n a l e f o r t h e d o c t r i n e h a s b e e n c i t e d by v a r i o u s c o u r t s a s e s t o p p e l and l a c h e s . La P o r t o v . V i l l a g e o f P h i l m o n t ( 1 9 7 6 ) , 39 N.Y.2d 7 , 346 N.E.2d 503, 505; S c o t c h P l a i n s Township v . Town o f W e s t f i e l d ( 1 9 6 4 ) , 83 N . J . Super. 323, 1 9 9 A.2d 673, 676. The U n i t e d S t a t e s Supreme C o u r t u s e s t h e a c q u i e s c e n c e d o c t r i n e i n s e t t l i n g b o u n d a r y d i s p u t e s between s t a t e s . Ohio v . Kentucky (1973), 410 U.S. 641, 651, 93 S . C t . 1 1 7 8 , 1 1 8 4 , 35 L.Ed.2d 560, 568; M i c h i g a n v . W i s c o n s i n ( 1 9 2 6 ) , 270 U.S. 295, 308, 4 6 S . C t . 290, 294, 70 L.Ed. 595, 601. Other c o u r t s have a p p l i e d t h e d o c t r i n e t o s e t t l e b o u n d a r y d i s p u t e s between a d j o i n i n g c i t i e s , C i t y o f W h i t i n g v . C i t y o f E a s t C h i c a g o ( 1 9 7 7 ) , 266 I n d . 1 2 , 359 N.E.2d 536, and t o d e t e r m i n e i f d i s p u t e d a r e a s s h o u l d b e i n c l u d e d i n o r e x c l u d e d from m u n i c i p a l c o r p o r a t i o n s . - P o r t o , s u p r a , 346 N.E.2d La 503. P e r h a p s b e c a u s e o f t h e p a u c i t y o f a u t h o r i t y on t h e d o c t r i n e , no c a s e s e t t i n g o u t t h e e l e m e n t s o f a c q u i e s c e n s e c o u l d b e f o u n d . F a c t o r s c o n s i d e r e d by v a r i o u s c o u r t s i n determining t h e a p p l i c a b i l i t y of t h e d o c t r i n e i n c l u d e : w h e t h e r o r n o t p r o p e r t y i n t h e d i s p u t e d a r e a was t a x e d by t h e c i t y , G r i f f i n v . Town o f P i n e B l u f f s (Wyo. 1 9 6 2 ) , 368 P.2d 1 3 2 ; L e a r y v . Mayor a n d Aldermen o f J e r s e y C i t y ( 3 r d Cir. 1 9 1 3 ) , 208 F . 854, 856; t h e e x e r c i s e o f p e r s o n a l a n d c i v i l r i g h t s s u c h a s v o t i n g by r e s i d e n t s o f t h e d i s p u t e d - a r e a , La P o r t o , s u p r a , 346 N.E.2d a t 505; S t a t e e x r e l . C i t y o f M i n o t v . W i l l i s ( 1 9 0 8 ) , 1 8 N.D. 76, 1 1 8 N.W. 820, 822; t h e r e c o r d s on f i l e p e r t a i n i n g t o t h e b o u n d a r i e s o f t h e m u n i c i p a l i t y , G r i f f i n v . Town o f P i n e B l u f f s (Wyo. 1 9 6 1 ) , 366 P.2d 993; Town o f S t e p h e n s C i t y v . Zea ( 1 9 6 3 ) , 204 Va. 82, 129 S.E.2d 1 4 ; provision of municipal s e r v i c e s t o t h e - d i s p u t e d t e r r i t o r y , C i t y o f W h i t i n g s u p r a , 359 N.E.2d a t 539; and t h e e x e r c i s e o f p o l i c e and r e g u l a t o r y powers o v e r t h e p r o p e r t y , -t-o f W h i t i n g , s u p r a . Ci y The p r e s e n c e o r a b s e n c e o f any o n e o f t h e s e f a c t o r s does n o t n e c e s s a r i l y r e q u i r e o r preclude t h e a p p l i c a t i o n of t h e d o c t r i n e . Courts consider t h e t o t a l i t y of t h e circumstances i n determining i f t h e d o c t r i n e should apply. City of Whiting, 359 N.E.2d a t 539. The t h r e s h o l d q u e s t i o n w e f a c e i s w h e t h e r o r n o t t o a d o p t t h e a c q u i e s c e n c e d o c t r i n e i n Montana. W e recently r e c o g n i z e d t h e d o c t r i n e i n Gregory v . C i t y o f F o r s y t h , No. 14584, d e c i d e d F e b r u a r y , 1980. The common law i s t h e law i n Montana where i t d o e s n o t c o n f l i c t w i t h Montana s t a t u t e s . S e c t i o n 1-1-108, MCA. On t h e b a s i s o f Gregory and s e c t i o n 1-1-108, MCA, w e s h o u l d a d o p t t h e a c q u i e s c e n c e d o c t r i n e i n s o f a r a s i t d o e s n o t c o n f l i c t w i t h Montana s t a t u t e s . The n e x t l o g i c a l s t e p i n a n a l y z i n g t h e problem h e r e would b e t o c o n s i d e r t h e e l e m e n t s o f t h e a c q u i e s c e n c e d o c t r i n e i n l i g h t of t h e f a c t s involved i n t h i s case. However, o n e i m p o r t a n t c a v e a t t o s e c t i o n 1-1-108, MCA makes t h i s s t e p unnecessary. The s e c t i o n s t a t e s i n p a r t : "In this state t h e r e i s no common law i n a n y c a s e where t h e l a w i s d e c l a r e d by s t a t u t e . " T h i s l a n g u a g e h a s been i n t e r p r e t e d i n t h e c o n t e x t o f t h e i n c l u s i o n o f p r o p e r t y w i t h i n a c i t y on a p r i o r o c c a s i o n i n P o o l v. Town o f Townsend ( 1 9 2 0 ) , 58 Mont. 297, 1 9 1 P. 385. I n Pool, t h e p l a i n t i f f sought an i n j u n c t i o n r e s t r a i n i n g t h e town o f Townsend from e n f o r c i n g t h e payment of a s p e c i a l improvement t a x l e v i e d on p r o p e r t y he owned. A t t h e t i m e t h e C i t y s o u g h t t o impose t h e t a x , the property had n o t been p r o p e r l y annexed i n t o t h e c i t y . The C i t y a r g u e d t h a t , e v e n t h o u g h t h e p r o p e r p r o c e d u r e had n o t been f o l l o w e d i n a n n e x i n g t h e d i s p u t e d p r o p e r t y , a common l a w d e d i c a t i o n and a c c e p t a n c e o f t h e s t r e e t s and a l l e y s i n t h e a r e a including t h e p r o p e r t y brought t h e p r o p e r t y w i t h i n t h e town l i m i t s . The C o u r t r e j e c t e d t h e C i t y ' s argument. I n s o d o i n g , t h e C o u r t c i t e d l a n g u a g e from a s i n c e r e p e a l e d s t a t u t e i d e n t i c a l t o t h e above-quoted l a n g u a g e i n s e c t i o n 1-1-108. Based o n t h e d i r e c t i v e o f t h e s t a t u t e n o t t o a p p l y t h e common law where s u p e r c e d e d by s t a t u t e , t h e C o u r t r e a s o n e d that: " I f , t h e n , t h e Codes p r o v i d e t h e means by which a n a d d i t i o n becomes a p a r t o f a c i t y o r town and s u b j e c t t o i t s j u r i s d i c t i o n , t h e means s o p r o v i d e d must b e h e l d t o b e e x c l u s i v e . " P o o l , s u p r a , 58 Mont. a t 304. (Emphasis a d d e d . ) The C o u r t went on t o h o l d t h a t s i n c e a n n e x a t i o n p r o c e - d u r e s w e r e p r o v i d e d f o r i n t h e Code, t h e p r o p e r t y c o u l d n o t b e i n c l u d e d i n t h e Town o f Townsend u n l e s s t h o s e p r o c e d u r e s w e r e followed. Gregory, s u p r a , a f f i r m s P o o l ' s conclusion and r a t i o n a l e . Greqory and P o o l r e j e c t a common law method o f i n c l u d i n g p r o p e r t y i n a m u n i c i p a l i t y and e s t a b l i s h a n n e x a t i o n a s t h e e x c l u s i v e means o f b r i n g i n g p r o p e r t y i n t o a town o r c i t y . The n e g a t i v e i n f e r e n c e l o g i c a l l y drawn from t h a t r u l e i s t h a t Montana's de-annexation s t a t u t e s , i.e. s e c t i o n s 7-2- 4801 t o 7-2-4810, MCA, p r o v i d e t h e e x c l u s i v e means f o r e x c l u d i n g p r o p e r t y from m u n i c i p a l i t i e s . Under t h i s a n a l y s i s , t h e common l a w d o c t r i n e o f a c q u i e s c e n c e c a n n o t b e a p p l i e d i n t h i s case t o s u p e r c e d e t h e a n n e x a t i o n s t a t u t e s and t h e d i s p u t e d p r o p e r t y s h o u l d b e c o n s i d e r e d a p a r t o f t h e town o f Melstone. W e r e a c h t h i s same c o n c l u s i o n by a p p l y i n g t h e a c q u i e s - cence d o c t r i n e . I n Gregory w e s a i d , ". . . ' T h e -u- - t o - r le a s establishment - municipal boundaries of & acquiescence does n o t a p p l y where t h e p e r i o d o f a c q u i e s c e n c e i s s h o r t o r where t h e boundary i n v o l v e d - c l e a r l y o t h e r w i s e t h a n c l a i m e d . ' is 2 McQuillin, supra, 5 7.09 a t 308 ( e m p h a s i s a d d e d ) . " Gregory O p i n i o n a t p . 8. H e r e , a s i n Gregory, t h e b o u n d a r i e s i n dispute are clear. None o f t h e p a r t i e s d i s p u t e t h e f a c t t h a t i n 1913 t h e Town o f M e l s t o n e i n c o r p o r a t e d and i n c l u d e d w i t h i n i t s b o u n d a r i e s t h e p r o p e r t y now owned by t h e B a l o c k s . No o n e c o n t e n d s t h e p r o p e r t y h a s been de-annexed from M e l s t o n e since t h a t t i m e . The d i s p u t e h e r e c e n t e r s a r o u n d t h e e f f e c t on t h e Balock p r o p e r t y o f t h e m i s t a k e n b e l i e f t h a t t h e p r o p e r t y was o u t s i d e t h e town. T h a t b e l i e f h a s no e f f e c t o n t h e p r o p e r t y ' s s t a t u s , even applying t h e d o c t r i n e of acquiescence where t h e b o u n d a r i e s a r e c l e a r . We therefore affirm the judgment o f t h e D i s t r i c t C o u r t on t h i s i s s u e . Moving t o a c o n s i d e r a t i o n o f t h e s e c o n d i s s u e , v a r i o u s s t a t u t e s a p p l i c a b l e t o t h i s s i t u a t i o n and i n e f f e c t a t t h e t i m e appellants i n i t i a t e d t h i s s u i t required notice t o t a x p a y e r s by o f f i c i a l s b e f o r e c h a n g i n g p r o p e r t y t a x a s s e s s - ments. S e c t i o n 84-602, R.C.M. 1947, which was r e p e a l e d i n 1977, r e q u i r e d w r i t t e n n o t i c e t o a t a x p a y e r by t h e County Board o f E q u a l i z a t i o n o f i t s i n t e n t i o n t o i n c r e a s e o r l o w e r h i s assessment s o a s t o e q u a l i z e t h e assessment of t h e p r o p e r t y t o conform w i t h i t s t r u e v a l u e . The County Board o f E q u a l i z a t i o n was a l s o r e q u i r e d t o n o t i f y i n t e r e s t e d p e r s o n s b e f o r e d i r e c t i n g t h e County A s s e s s o r t o t a x p r o p e r t y t h a t had e s c a p e d a s s e s s m e n t u n d e r pre-1977 law. s e c t i o n 84- 609, R.C.M. 1947. The S t a t e Board o f ~ q u a l i z a t i o nwas s u b j e c t t o s i m i l a r n o t i c e requirements. S e c t i o n 84-710, R.C.M. 1947, r e p e a l e d i n 1977, r e q u i r e d n o t i c e b e f o r e a n y change i n a s s e s s m e n t . S e c t i o n 84-711, R.C.M. 1947, which was amended i n 1977, r e q u i r e d t h e S t a t e Board t o g i v e n o t i c e before reassessing property previously assessed incorrectly. These s t a t u t e s c l e a r l y i n d i c a t e a p p e l l a n t s s h o u l d have been n o t i f i e d b e f o r e t h e County r e a s s e s s e d t h e i r p r o p e r t y . The C o u r t must t h e r e f o r e r e v e r s e t h i s c a s e u n l e s s t h e C o u r t f i n d s a p p e l l a n t s waived t h e i r r i g h t t o n o t i c e . Here i t c a n be a r g u e d t h a t a p p e l l a n t s waived s u c h r i g h t by a p p e a r i n g b e f o r e t h e S t a t e Tax A p p e a l s Board t o c o n t e s t t h e i r p r o p e r t y reassessment. I f t h e s t a t u t e a u t h o r i z i n g a change i n p r o p e r t y a s s e s s - ment r e q u i r e s n o t i c e b e f o r e t h e E q u a l i z a t i o n Board c a n change a n a s s e s s m e n t , t h e n o t i c e i s a p r e r e q u i s i t e t o t h e j u r i s d i c t i o n o f t h e E q u a l i z a t i o n Board t o c h a n g e t h e a s s e s s - ment o f t h e p r o p e r t y . Montana O r e P u r c h a s i n g Co. v . Maher (19051, 32 Mont. 480, 487, 8 1 P. 1 3 , 14-15; W e s t e r n Ranches, L t d . v . C u s t e r County ( 1 9 0 3 ) , 28 Mont. 278, 281, 72 P . 659, 660. An a p p e a r a n c e by a p a r t y t o c h a l l e n g e a change w i t h o u t n o t i c e d o e s n o t c o n s t i t u t e w a i v e r of t h e n o t i c e r e q u i r e m e n t . Western Ranches, L t d . , s u p r a , 28 Mont. a t 282. I f , however, the applicable s t a t u t e requires notice a f t e r the property h a s been r e a s s e s s e d , n o t i c e i s n o t c o n s i d e r e d j u r i s d i c t i o n a l . An a p p e a r a n c e by a t a x p a y e r u n d e r t h i s t y p e o f s t a t u t e d o e s c o n s t i t u t e a waiver of t h e n o t i c e requirement i f t h e tax- p a y e r h a s a c h a n c e t o p r e s e n t t h e m e r i t s o f h i s case. Anaconda Copper Mining Co. v . R a v a l l i County ( 1 9 1 9 ) , 56 Mont. 530, 532-535, 186 P . 332, 333-334. Here t h e a p p l i c a b l e s t a t u t e s r e q u i r e d n o t i c e b e f o r e re- assessment. The n o t i c e i s j u r i s d i c t i o n a l u n d e r t h e above cases. The appearance by appellants to contest the reassess- ment does not constitute waiver of the jurisdictional notice requirement. The reassessment should therefore be considered void as entered without jurisdiction and the District Court reversed on this issue. As a practical matter, finding the improper procedure was followed by the respondents does not prohibit the collec- tion of the disputed taxes. Section 15-8-601, MCA allows the Department of Revenue to reassess property erroneously assessed within the preceding ten years. The section sets up procedural guidelines for correcting past improper assess- ments. The respondents here can follow the statutory proce- dures and collect the taxes on appellants' property for the years in question. To summarize, Montana's annexation and de-annexation statutes provide the method for including or excluding property into or from cities and towns. That procedure is exclusive under Gregory and Pool, supra. Appellants should not, therefore, be permitted to de-annex their property from Melstone under any other procedure. Neither does the doctrine of acquiescence allow the exclusion of the property since the boundaries of Melstone are clear. Gregory, supra. The District Court should be affirmed on this issue. Appellants did not receive proper notice of the reassessment of their property. The lack of notice is a jurisdictional defect rendering the reassessment void. Appellants' appearance in this matter did not represent a waiver of the notice require- ment. See Montana Ore Purchasing =. and Western Ranches, - supra. Ltd., This defect warrants reversal. The judgment of the District Court is reversed. W e concur: %&&&- Chief J u s t i c Q . 8 9 Justices