NO. 87-462
IN THE SUPREME COURT OF THE STATE OF MONTANA
1988
DOUG L. HAGFELDT and ANNETTE E. HAGFELDT,
Plaintiffs and Appellants,
-VS-
CITY OF BOZEMAN, MONTANA,
Defendant and Respondent.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas A. Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Ben Berg, Jr., Berg, Stokes, Tollefsen & Hayes, P.C.;
Bozeman, Montana
For Respondent :
Sarah M. Power, Gough, Shanahan, Johnson & Waterman;
Helena, Montana
Submitted on Briefs: February 18, 1988
Decided: April 25, 1988
Filed:
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
This is an appeal from an order of the Eighteenth
Judicial District Court, Gallatin County, granting the City
of Bozeman's (City) motion for summary judgment on grounds it
sufficiently complied with statutory mandate in this class
action claim brought by a number of Bozeman landowners
.
(Landowners) We affirm.
The only issue for consideration is whether the City
legally complied with the requirements of $ 76-2-402, MCA
(1987), when it constructed a water tank contrary to its
zoning regulations.
Both parties agree there is no question of fact and
summary judgment is appropriate as a matter of law. This
appeal is based on the contention that the District Court
should have granted the Landowners' motion for summary
judgment rather than the City's.
In April of 1985, the City began construction on a
water tank in Josephine Park in Bozeman, Montana. This park
is located in an area known as Graf's First Subdivision,
Second Filing. The surrounding neighborhood and the land on
which the tank was constructed are zoned R-2, single family
dwellings and other permitted and conditional uses.
The record indicates that a public hearing was held
before the Bozeman City-County Planning Board to review the
preliminary plat of Graf's First Subdivision, Second Filing,
on February 10, 1983. At this hearing, the public was
notified that the City planned to construct the water storage
facility involved in this action.
Plaintiffs are a number of landowners who live close to
the area where the water tank was constructed. Landowners
claim the City constructed the tank in violation of zoning
regulations and because of this construction, the value of
their property decreased. To support its defense, the City
argues it is exempt from zoning regulations and relies on
§ 76-2-402, MCA, which provides as follows:
Whenever an agency proposes to use public
land contrary to local zoning
regulations, a public hearing, as defined
below, shall be held.
(1) The local board of adjustments, as
provided in this chapter, shall hold a
hearing within 30 days of the date the
agency gives notice to the board of its
intent to develop land contrary to local
zoning regulations.
(2) The board shall have no power to
deny the proposed use but shall act only
to allow a public forum for comment on
the proposed use.
Of further importance is the definitional section for
this statute, § 76-2-401, MCA, which provides:
As used in 76-2-402, the following
definitions apply:
(1) "Agency" means a board, bureau,
commission, department, an authority, or
other entity of state or local government
Landowners claim that under 5 76-2-402, the City had an
obligation to hold a public meeting prior to commencement of
the April, 1985 construction of the water tank. Landowners
claim the language "proposes to use" and "intent to develop"
shows the statute cannot be applied in a retroactive fashion.
The City attached affidavits to its memorandum in
support of its motion for summary judgment showing it held a
public meeting on June 24, 1985. It claims the meeting was
sufficient to satisfy the statutory mandate and, nonetheless,
it is exempt from any ordinance because of the legislative
intent and history of § 76-2-402, MCA. Alternatively, the
City claims the action is barred under the provisions of
5 2-9-111, MCA, because it is a governmental entity "immune
from suit for an act or omission of its ... member,
officer, or agent" of the legislative body.
These claims raise interesting points that have not
been addressed by this Court. Landowners rely on two cases.
In Rich v. City of Englewood (Colo. 1983) , 657 P.2d 961, the
Colorado Court of Appeals affirmed an injunction prohibiting
the construction of a water tank that did not comply with
local footage setback requirements. That decision, however,
specifically points out that "an injunction is an appropriate
remedy for violations of zoning ordinances." Rich, 657 P.2d
at 962. Here, it is unclear what remedy the Landowners seek.
There is no prayer for damages in the complaint and
injunctive relief is not sought. Further, the reasoning in
Rich was questioned by the Colorado Supreme Court in the
subsequent case of City of Englewood v. Rich (Colo. 1984),
686 P.2d 780, because the Englewood City Council amended its
zoning ordinance expressly exempting the city from the zoning
regulations thereby making the issue moot according to the
court.
The second case cited by Landowners, Hunke v. Foote
(Idaho 1962), 373 P.2d 322, was a proceeding by residents for
a writ of mandamus to force the city to remove an electrical
substation that the city constructed in violation of its
zoning ordinances. The Idaho Supreme Court applied a
"governmental-proprietary" function distinction and denied
the city an exemption from the zoning ordinance. The court
stated "[wlhen operating in its proprietary capacity a
municipal corporation is subject to the same burdens,
responsibilities and liabilities as a private corporation or
individual acting in the same capacity." Hunke, 373 P.2d at
323. We find the rationale of these cases insufficient to
decide the issue before us.
Much has been written concerning exemption of a
governmental agency from zoning ordinances although the vast
majority of legal prose has dealt with two opposing
governmental agencies, one of which wishes to be exempt from
the other's zoning requirements. See 2 Anderson,
American Law of Zoning, 55 12.02-12.04 (3d ed. 1986) ; Note,
Governmental Immunity from Zoning, 22 B.C.L.Rev. 783
(1980-81); Note, Governmental Immunity From Local Zoning
Ordinances, 84 Harv.L.Rev. 869 (1971). A survey of the case
law in existence unfurls four basic theories by which courts
of this country have addressed this issue.
The general rule is that municipalities are granted
exemption from zoning ordinances in modulating degrees
depending on the theory of exemption of the jurisdiction. 82
Am.Jur.2dr Zoning and Planning S S 149, 150, 152 and 153
(1976) indicates that municipalities are exempt: (1) by
express language in the ordinance itself; (2) by immunity of
the sovereign from suit; (3) by the distinction between the
entity exercising a governmental or proprietary function; and
(4) by the doctrine of eminent domain. In application of
any of these tests, as the commentators have complained,
problems are rampant.
The governmental-proprietary distinction test is most
prevalent, but it is not without fault.
"Governmental functions" are those
conferred or imposed upon the
municipality as a local agency of limited
and prescribed jurisdiction to be
employed in administering the affairs of
the state and promoting the public
welfare . . .
When a municipal
corporation engages in an activity of
business, rather than one of a
governmental nature, such as the supply
of light or water or the operation of a
railroad which is generally engaged in by
individuals or private corporations, it
acts as such corporation and not in its
sovereign capacity [proprietary].
State ex rel. Gebhardt v. City Council of Helena (1936), 102
Mont. 27, 35-36, 55 P.2d 671, 675.
This distinction has been criticized as oversimplistic
and illusory. The wisdom of the governmental-proprietary
function test is subject to question. City of Temple Terrace
v. Hillsborough Ass'n for Retarded Citizens (Fla. 1975), 322
So.2d 571, 577, aff'd (Fla. 1976), 332 So.2d 610; Township of
Washington v. Village of Ridgewood (N.J. 1958), 141 A.2d 308.
2 Anderson, American - - Zoning, 5 12.03, pp. 481-482
Law of
(1986) accurately shows the problem with the
proprietary-governmental distinction, especially as it
applies to the issue we are faced with here:
A municipality may carry out its
governmental functions without regard to
zoning restrictions, but it is subject to
such restrictions when it is engaged in a
proprietary function. The great
difficulty lies in determining which
functions are governmental, and which are
proprietary. The distinction is of
ancient vintage, but it is neither clear
nor stable. What is regarded as
governmental for one purpose . .. is not
necessarily so regarded for a different
purpose. And a proprietary function of a
municipal government of 1955 may become a
governmental function in 1965 ... A
North Carolina court held that the
erection of a water tank is a
governmental function which may be
carried out without regard to local
zoning regulations. The same result was
reached by the Supreme Court of Kansas,
with some aid from a state statute. The
courts of Alabama, Florida, Illinois,
Michigan and Pennsylvania have described
the municipal water service as a
proprietary function which must be
carried out consistently with the
municipal zoning regulations. See
McKinney v. High Point (N.C. 1953), 74
S.E.2d 440; Puhr v. Kansas City (Kan.
1935), 51 P.2d 911; Water Works Board v.
Stephens (Ala. 1955), 78 So.2d 267;
Treasure Island v. Decker (Fla. 1965),
174 So.2d 756; Baltis v. Westchester
(Ill. 1954), 121 N.E.2d 495; Taber v.
Benton Harbor (Mich. 1937), 274 N.W. 324;
Wilkinsburg-Penn Joint Water Authority v.
Churchill (Pa. 1965), 207 A.2d 905.
The proprietary-governmental function distinction has
also been criticized as being irrelevant because the immunity
concept was developed only to limit a governmental entity's
exposure in tort and has been held to be inapplicable in
zoning cases. City of Fargo, Cass County v. Harwood Township
(N.D. 1977), 256 N.W.2d 694; Seward County Board of
Commissioners v. City of Seward (Neb. 1976), 242 N.W.2d 849.
This distinction is archaic and muddled and no creative
argumentation should convince us to continue to apply the
governmental-propietary function analysis.
The City argues in this case that it is exempt from the
zoning regulations under the theory of immunity pursuant to
5 2-9-111, MCA, making any "governmental entity" immune.
Section 18, Article I1 of the Montana Constitution and
5 2-9-102, MCA, express the policy that governmental immunity
is not favored in this state. Our legislature, however, has
enacted B 2-9-111, MCA, and for us to totally disregard the
City's claim that it is immune would be remiss on our part.
Nonetheless, under the facts of this case and in light of
5 76-2-402, MCA, we will not determine this case soley by
granting the City blanket immunity.
The common law sovereign-immunity rule has been
addressed a number of times by state courts only occasionally
resulting in allowances of agencies' uses in contravention of
municipal zoning ordinances. City of ~ichmond v. Board of
Supervisors (Va. 1958), 101 S.E.2d 641; viat ti on Services,
Inc. v. Board of Adjustment (N.J. 1956), 119 A.2d 761.
Generally, however, this rule has been implemented where
there are two separate governmental entities, one being
"superior1'to the other. The test has been widely criticized
because it fails to recognize that municipalities are acting
as agents of the state under state enabling acts and further
does not provide a feasible means to determine which agent
should prevail where "there are overlapping and conflicting
territorial jurisdictions." Note, Governmental Immunity From
Local Zoning Ordinances, 84 Harv.L.Rev. at 877.
Critiques such as these have prompted many courts over
the last several years to question seriously the continued
viability of the sovereign-immunity rule in today's highly
urbanized society. The reasoning of the court in City - of
Temple Terrace, supra, 322 So.2d at 578-579, is most
compelling.
The old tests were adopted at a time when
state government was much smaller. The
myriad of agencies now conducting the
functions of the state have necessarily
resulted in a diminution of centralized
control. The decision of a person
administering an outlying function of a
state agency with respect to the site
where this function should be performed
is not necessarily any better than the
decision of the local authorities on the
subject of land use. * * *
Our burgeoning population and the rapidly
diminishing available land make it all
the more important that the use of land
be intelligently controlled. This can
only be done by a cooperative effort
between interested parties who approach
their differences with an open mind and
with respect for the objectives of the
other.
Blackstone Park Improvement Ass'n, et al. v. State of Rhode
Island (R.I. 1982), 448 A.2d 1233, 1237-1238.
Generally, even where governmental immunity is found,
it should not be exercised in a fashion that is unreasonable
and arbitrarily overrides all important legitimate local
interests. Blackstone, supra, 448 A.2d at 1239. There are
in this case important, legitimate local interests that
should be considered and to blindly adopt the immunity
claimed by the City would be to entirely disregard these
concerns.
Further, the language of City of Temple, supra, dealt
largely with the question of two governmental entities and is
extremely close to the test of eminent domain. The rationale
for the eminent domain test is the presumption that the
legislature's grant of such power conclusively establishes
the governmental entity's superiority where its proposed land
use runs counter to local zoning provisions. Blackstone, 448
A.2d at 1238, e.g., City of Kirkwood v. City of Sunset Hills
(Mo.Ct.App. 1979), 589 S.W.2d 31; Mayor of Savannah v.
Collins (Ga. 1954), 84 S.E.2d 454. This test likewise
disregards the important local concerns of development in a
modern society and we choose not to adopt it here.
The Blackstone court noted that all of the traditional
tests are flawed because "they are overly simplistic and
often lead to resolution of a multifaceted zoning-conflicts
issue through the use of conclusive labels rather than
through perceptive adjudication." Blackstone, 448 A.2d at
1238; citing Brownfield v. State (Ohio 198O), 407 N.E.2d
1365, 1367-1368, overruled on other grounds, 503 N.E.2d 1025,
1028; Brown v. Kansas Forestry, Fish and Game Commission
(Kan. 1978), 576 P.2d 230, 232.
The more enlightened test, adopted in Blackstone and
followed by a number of jurisdictions involves the so-called
"balancing-of-interest" analysis developed by the New Jersey
Supreme Court and the Minnesota Supreme Court at
approximately the same time. Town of Oronoco v. City of
Rochester (Minn. 1972), 197 N.W.2d 426; Rutgers State
University v. Piluso (N.J. 1972), 286 A. 2d 697. The test is
best laid out in Rutgers, 286 A.2d at 702 and first requires
an analysis of legislative intent. The Rutgers court stated
that this intent may be obscured but can be discerned from
consideration of the following factors: (1) the nature and
scope of the instrumentality seeking immunity; (2) the kind
of function or land use involved; (3) the extent of the
public interest to be served; (4) the effect local land-use
regulations would have upon the enterprise concerned; and
(5) the impact upon legitimate local interest.
Oronoco , supra, and Rutgers, supra, can be
distinguished from the case at bar because both dealt with
competing governmental entities. In Oronoco, the question
was whether the city of Rochester was exempt from the zoning
requirements of Oronoco in the development of a sanitary
landfill to benefit the town of Rochester but located in the
township of Oronoco. Rutgers involved competing governmental
entities in the form of the state university which wished to
alleviate a shortage of education facilities by expanding a
500-unit ceiling for student housing which was in violation
of the local municipal zoning ordinance. In both cases, the
courts allowed the exemption. The Rutgers court stated that
in some cases the "broader public interest is so important
that immunity must be granted even though the local interests
may be great." Rutgers, supra, 286 A.2d at 703. However,
the court cautioned that immunity was not completely
unleashed:
Even where [immunity] is found to exist,
it must not * * * be exercised in an
unreasonable fashion so as to arbitrarily
override all important legitimate local
interests. This rule must apply to the
state and its instrumentalities as well
as to lesser governmental entities
entitled to immunity. * * * And, at the
very least, even if the proposed action
of the immune governmental
instrumentality does not reach the
unreasonable stage for any sufficient
reason, - instrumentality ought to
the
consult - - local authorltles and
with the
sympathetically listen and give every
consideration to local ob~ectlons,
problems - suggestions - order -
and in to
minimize the conflict as - -much as
~ossible. (Em~hasis added.-1
Rutgers, 286 A.2d at 703.
The wbalancing-of-interests test," as the Blackstone
court noted, has been followed in Florida, Hawaii, Kansas,
Michigan, Minnesota, North Dakota, Ohio, Pennsylvania, and
South Dakota. Citing cases, Blackstone, supra, 448 A.2d at
1239. We feel that this is the most enlightened approach to
this complex question. We recognize also that these courts
have adopted the "balancing-of-interests test" in cases
involving competing governmental entities. However, due to
the existence of § 76-2-402, MCA, and its mandate to merely
provide a public forum, and the distinguishable nature of
this case where we have a communities' own citizens
challenging the City for violating its own zoning ordinance,
we need not apply the "balancing-of-interests test" in this
case.
As suggested in Rutgers, the legislative intent of the
statute in question, 9 76-2-402, MCA, will first be
considered. Landowners argue that the language "whenever an
agency proposes to use public land contrary to local zoning
regulations," and the fact that the board of adjustments can
only act upon notice of the agency's "intent to develop land
contrary to local zoning regulations" shows the statute
contemplates approval of future action. The City claims the
language requires only that a public hearing be held by the
local board of adjustments within thirty days of the date the
agency gives notice to the board of its intent to develop the
land contrary to the zoning regulations.
The City points to the affidavits attached to its
motion for summary judgment showing that the board of
adjustments did hold the hearing within thirty days of the
date the board was given notice of the City's intent.
Additionally, the City points out, and a reading of
subsection (2) shows, the board of adjustments has no power
to deny the proposed use but rather is only required to
provide a public forum for comment.
The City additionally argues that the legislative
intent can be gleaned from the legislative history which
shows that the bill which ultimately became 9 76-2-402, MCA,
was originally introduced entitled: "An act requiring land
development and use by governmental agencies to conform to
local zoning regulations." The bill was finally passed
entitled: "An act requiring land development and use by
governmental agencies to be subject to public hearing."
Therefore, the City claims, the end result was that the
legislature recognized that government agencies are not
subject to zoning regulations.
We do not conclude that the intent of the legislature
is clear merely by the changing of the title of the bill.
However, we do affirm the ruling of the District Court in
this case. The District Court properly noted that a reading
of 5 76-2-402, MCA, shows that "[wlhether the use is proposed
or construction underway, an analysis of Montana's zoning law
discloses that a municipality's construction of a service
facility which does not comply with the zoning ordinances is
subject only to public comment and not prohibition by the
Board of Adjustment."
F7henever this Court determines legislative intent, we
look first to the plain meaning of the words used in the
statute. W. D. Construction, Inc. v. Bd. of County Comm. of
Gallatin County (Mont. 1985), 707 P.2d 1111, 1113, 42 St.Rep.
1638, 1641; Dorn v. Bd. of Trust. of Billings Sch. Dist.
(1983), 203 Mont. 136, 144, 661 P.2d 426, 430. The issue
presented is disposed of by the very terms of S 76-2-402,
MCA. The section requires only an opportunity for a public
forum, it does not give power to the board of adjustments to
disallow any governmental action. The record shows the
public was allowed the opportunity to present complaints at
the June 24, 1985 meeting. The hearing was held, the public
was allowed to comment. No governmental violation of
§ 76-2-402, MCA, occurred and therefore no governmental
entity committed an act or omission giving rise to a cause of
action.
We do not accept the caselaw cited by the Landowners
because it turns on the antiquated and confusing
proprietary-governmental function test. Further, we do not
solely decide this case on the City's claim that it is immune
from the ordinance merely because of its status as a
governmental entity under 5 2-9-111, MCA.
We note that the Landowners, to present the issue
before the District Court regarding the City's action in this
case, could have attempted to attain injunctive relief. See,
Rich, supra, 657 P.2d at 962. The actions of the City,
nonetheless, were not in violation of the law as it was
required only to provide notice to the board of adjustments
which provided the public hearing.
We affirm.
/"
Justic
We concur: /7
Mr. Justice John C. Sheehy, dissenting:
If the reader, having read the foregoing opinion,
understands its reasoning, he or she may step to the head of
the class. After giving judicial blessing to the balancing
of interests tests of Oronoco and Rutgers, the opinion
declines to apply them and then partly applies them; it
chides the landowners for not seeking injunctive relief, and
then tells them no injunctive relief was possible; it refuses
to grant immunity from zoning regulations to cities, but
grants it; and it sweeps away as "antiquated," without any
necessity, the distinction between proprietary and
governmental functions of municipalities. It tells the
cities they are subject to their own zoning regulations, and
then tells them they are not. The landowners here are even
deprived of a right to question any abuse of discretion by
the city, a right of landowners surely should have under an
action for a writ of review.
It is a farce to uphold a statute that guarantees a
public hearing on an issue, but which statute also provides
that the hearing is purposeless, of no account, a mere
exercise in hearings. Who needs the exercise?
Moreover, the statement of facts by the majority is not
clear. The first notice to landowners that the city
disregarded its own zoning regulations was when the city
commenced building the water tank in April, 1985. It was not
until June, 1985, that the city provided the public hearing
required by S 76-2-402, MCA. A hearing after the fact is
even more of a farce.
I dissent. I would reverse the summary judgment.
) &, &j&&b+
Justice u