No. 14458
IN THE SUP- COUHT OF THE STATE OF MXfTANA
1979
Plaintiffs and Appellants,
CITY OF BILLINGS, et al.,
Defendants and Respondents.
Appeal £ram: District Court of the Thirteenth Jdicial District,
Hon. Charles Luedke, Judge presiding.
Counsel of Record:
For Appellants:
Fillner and Pitet, Billings, Mntana
Russell K Fillner argued, Billings, Mntana
.
For Respondents:
Peterson and Hunt, Billings, Mntana
K. D Peterson argued, Billings, bntana
.
Submitted: March 16, 1979
Decided: JUN 2 ; 1979
Filed: J N 2 . 19@
U
Mr. Justice John C. Sheehy delivered the Opinion of the Court.
Plaintiffs Arthur and Rachel Schanz appeal from
the judgment of the District Court, Yellowstone County,
which dismissed their claim that annexation by the defendants
City of Billings, et al., of certain property known as the
Hayes Subdivision was ineffective, dismissed their claim
that the Hayes Subdivision should not have been zoned R-7200
when it was annexed, and ordered that plaintiffs' application
for a zone change be heard and reconsidered in accordance
with criteria set forth in this Court's decision in Lowe
v. City of Missoula (1974), 165 Mont. 38, 525 P.2d 551.
Arthur Schanz has been in the construction business since
1953. In December 1971, Schanz purchased real property known
as the Hayes Subdivision, comprised of twenty lots situated
outside of, but contiguous to, the city limits of Billings,
Montana. During construction of a four-plex apartment on the
land, which began in June 1972, Schanz discovered that the
City's water and sewer services would not be extended to
the subdivision unless the property was annexed.
Schanz took no action on the matter for approximately
one year, but in the meantime enlisted the services of a
registered engineer, made arrangements with a contractor
to install water and sewer lines, and continued with his con-
struction work in the subdivision.
On July 5, 1973, the registered engineer, acting in
Schanz's behalf, applied to the City for permission to extend
water and sewer lines to the Hayes Subdivision. The Public
Utilities Board approved the application, and on July 16,
the City Council approved the requested extensions
"subject to annexation".
A request to extend city boundaries to include the
Hayes Subdivision appeared on the City Council agenda on
August 6, 1973, and the resolution of intent to extend the
boundaries of the City of Billings was adopted the same day.
Notice of the resolution was published and the matter came
before the City Council for final action on September 10,
1973, resulting in an expansion of the City's boundaries to
include the Hayes Subdivision.
The City Zoning Commission sent its recommended zoning
classification to the City Council on September 10, the same
day the resolution was passed to extend the City's boundaries.
A notice of public hearing fixing October 1, 1973, as the
date of hearing before the City Council was posted September
13, 1973, by the City clerk. No one appeared to speak in
favor of or against the Commission's recommendation and the
City Council adopted the recommendation by passage of Ordinance
No. 3744 on October 1. The land on which the four-plex
had been built was classified R-6000 (multi-family dwellings)
and the remainder was given a R-7200 classification (single
family dwellings and duplexes only).
Schanz did not attend any of the proceedings affecting
the property. However, he did continue his construction
activities, and by October 1973, Schanz had built or had
under construction two four-plexes and three single family
dwellings. When Schanz applied to the City for more building
permits and was refused because of the R-7200 zoning classifi-
cation, he began what was to be a continuous series of efforts
to be exempted from zoning regulations.
On or before February 11, 1974, Schanz applied for
a zone change to allow for construction of more four-plexes.
-3-
Persons living adjacent to the subdivision filed a protest
(the subdivision is surrounded by a R-9600 classification-
single family dwellings only). After failing to secure
a zone change, Schanz applied for a variance. The variance
was denied, and on March 3, 1975, Schanz again petitioned for
a zone change. The City Council denied the zone change on
April 28, 1975, reconsidered the application and denied it
again on May 19, 1975. The procedure was repeated with
the same result in June 1976.
This action was filed in District Court, Yellowstone
County, on September 3, 1976, to have the annexation resolution
declared null and void, to have the zoning classification
removed, or alternatively, to secure a zone change. On
July 24, 1978, the Honorable Charles Luedke entered judgment
dismissing the first and second claims and ordering that
the application for a zone change be reconsidered in accordance
with the criteria set forth in Lowe.
On appeal, plaintiffs present three issues:
1. Can an initial zone classification be made when
the notice and hearing on the matter by the City Zoning
Commission and City Council came before the affected area
was annexed by the City?
2. Can an initial zone classification be made when
the City Zoning Commission and City Council failed to comply
with the twelve-point test set forth in section 11-2703,
R.C.M. 1947, now section 76-2-304 MCA, and this Court's
decision in Lowe?
3. Are plaintiffs estopped from asserting that the
procedure for annexing the land was fatally defective,
rendering the annexation void?
The Zoning Commission for the City of Billings held a
hearing on September 10, 1973, to consider the zoning
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recommendation to be sent to the Billings City council
for the Hayes Subdivision. Notice of the hearing had been
published August 16, 1973. Following the hearing, the
Commission decided on a recommendation and sent it to the
City Council. The recommendation reached the City Council
approximately five (5) hours before the resolution annexing
the Hayes Subdivision was passed. Plaintiffs contend this
procedure violated section 7.03 of the Billings Zoning
Ordinance, and Article 11, Section 8 of the 1972 Montana
Constitution. Section 7.03 of the zoning ordinance provides:
"When a parcel of land lying outside the
corporate limits of the City of Billings
and within the Yellowstone County Zoning
jurisdiction is annexed to the City of
Billings, the property shall retain the
classification it has in the County but
will be reviewed by the City Zoning Com-
mission and a recommendation sent to the
City Council either reaffirming the County
classification or change the zoning class-
ification, within (90) ninety - -of
days
passage - - final resolution of annex-
of the -
ation." (Em~hasis added.)
Practically the same rules of construction apply to
an ordinance as apply to a statute. State ex rel. Bennett
v. Stow (1965), 144 Mont. 599, 399 P.2d 221. If the language
of an ordinance is plain and unambiguous, it is not subject
to interpretation or open to construction but must be accepted
and enforced as written. Sheridan County Electric Co-op,
Inc. v. Montana-Dakota Utilities Co. (1954), 128 Mont. 84,
Section 7.03 does not prohibit the Zoning Commission
from sending a recommendation before the final resolution of
annexation is passed. It merely requires that the recommendation
be sent no later than ninety days after the annexation resolution
is passed. There is no problem here with property being zoned
prior to annexation. The annexation resolution, passed on
September 10, 1973, went into effect on October 10, 1973,
pursuant to section 11-1106, R.C.M. 1947, now section 7-5-
4203(1) MCA. The actual zoning ordinance was not passed
until October 1, 1973, and similarly did not take effect
until thirty days later, on October 30, 1973. Consequently,
the Hayes Subdivision was given a zoning classification some
twenty days after the property was annexed by the City of
Billings. The problem here is that the City Zoning Commission
transmitted its recommendation to the City Council approximately
five hours before the Council acted on the annexation resolution.
Section 7.03 of the zoning ordinance does not require that
the recommendation be sent after the annexation resolution
passes and this Court will not impose such a requirement.
Plaintiffs fail to explain how their rights under
Article 11, Section 8 of the 1972 Montana Constitution have
been violated. Article 11, Section 8 provides:
"Riaht of Participation. The public has
to expect governmental agencies
to afford such reasonable opportunity for
citizen participation in the operation of
the agencies prior to the final decision
as may be provided by law."
The City Zoning Commission published a notice of public
hearing on August 16, 1973. The hearing was held on September
10, 1973. Then the City clerk of Billings published a notice
of public hearing by the City Council on the subject of the
Zoning Commission's recommended classification. The hearing
-
was held on October 1, 1973 and no person attended. Plaintiffs
were given a reasonable opportunity to participate and failed
to do so.
On July 22, 1974, this Court decided the case of Lowe,
which involved an appeal from a judgment of the District Court
-6-
upholding an ordinance passed by the Missoula City Council
rezoning certain residential property. The plaintiffs
challenged the adoption of the ordinance on the grounds that
the ordinance had not been adopted in accordance with the
provisions of section 11-2703, R.C.M. 1947.
Section 11-2703, R.C.M. 1947, now section 76-2-304 MCA
sets forth guidelines a City Council must follow in its
regulation of land:
"11-2703. Purposes - -
of act. Such regulations
shall be made in accordance with a comprehensive
plan and designed to lessen congestion in the
streets; to secure safety from fire, panic, and
other dangers; to promote health and the general
welfare; to provide adequate light and air; to
prevent the overcrowding of land; to avoid undue
concentration of population; to facilitate the
adequate provision of transportation, water, sew-
erage, schools, parks, and other public requirements.
Such regulations shall be made with reasonable
consideration, among other things, to the character
of the district and its peculiar suitability for
particular uses, and with a view to conserving the
value of buildings and encouraging the most
appropriate use of land throughout such municipality."
In Lowe, this Court concluded that the record made by
the City Council and relied on by the District Court was so
lacking in fact information that it could not be said that
the requirements of section 11-2703 had been followed.
Precisely, the Court held that the District Court had abused
its discretion in upholding the zoning ordinance in disregard
of the contention that statutory law had not been followed
in the enactment of the ordinance.
A contention similar to that in Lowe was presented to
the District Court in this case. The District Court failed
to find merit in the contention however, and did not examine
the City Council's record because passage of the zoning
ordinance on October 1, 1973, predated the decision in Lowe.
Plaintiffs seek to have the District Court's conclusion
overturned for the reason that the statute providing the steps
a City Council must follow in its regulation of land was in
existence long before the Lowe decision was handed down.
We agree with the plaintiffs on this point. It was not
the Lowe decision that created a twelve-point test for
adopting zoning ordinances. Rather, section 11-2703, originally
enacted in 1929, mandated the consideration of twelve independent
factors prior to the passage of any zoning ordinance.
Defendants do not dispute plaintiffs' allegation concerning
the inadequacy of the record, but instead contend that, due
to language in Lowe, an initial zoning classification may not
be disturbed by the courts. In Lowe, we said:
"The city argues that under Montana's section
11-2703, R.C.M. 1947, it cannot be charged
with an abuse of discretion if the record
indicates the City Council and the district
court had before them reasonable evidence
or testimony upon which they could find
that one or more of the purposes of the
enabling statute had been accomplished. Further,
that the matter was largely within the council's
legislative authority and there is a presumption
that it had investigated and found the conditions
to be such that the legislation which it enacted
was appropriate and that the courts must hold
that the action of the legislative body (the
City Council) is valid.
"While neither the trial court nor this Court can
substitute its discretion for that of the City
Council, the judiciary does have the power to find
whether or not there has been an abuse of dis-
cretion. Freeman v. Board of Adjustment, 97 Mont.
342, 34 P.2d 534. There is under Montana statutes
and case law a sound distinction between "zoning"
and the act of "rezoning" or granting or refusing
a variance. The former constitutes a legislative
act while the latter is more of an administrative
or quasi-judicial act in applying provisions of
existing ordinance or law. In such application
the exercise of sound discretion is limited by
the provisions of the statute, including such
standards as are set forth therein. Low v. Town
of Madison, 135 Conn. 1, 60 A.2d 774." 165 Mont.
at 43.
A review of authorities reveals no elemental distinction
between the act of "zoning" and the act of "rezoning". A
rezoning ordinance, like a zoning ordinance, is a legislative
enactment, and is entitled to the presumptions of validity
and reasonableness. Sundance Hills Homeowners Association
v. Board of County Commissioners for Arapahoe County
(1975), 188 Colo. 321, 534 P.2d 1212, Smith v. Washington
County (1965), 241 Or. 380, 406 P.2d 545; Bishop v. Town
of Houghton (1966), 69 Wash.2d 786, 420 P.2d 368. See also:
82 Arn.Jur.2d Zoning - Planning S18, p. 414, and 1 Anderson
and
American - of Zoning S4.28.
Law -
Although we depart here from the distinction expressed
in Lowe between the acts of zoning and rezoning, we none-
theless continue to hold that where the information upon
which a City Council and District Court act is so lacking
in fact and foundation, it is clearly unreasonable and con-
stitutes an abuse of discretion. An ordinance, whether it
be enacted for the purpose of zoning or rezoning areas
within City boundaries, is invalid unless made in accordance
with the provisions of section 11-2703, now section 76-2-
304 MCA. Therefore, this case must be remanded to the
District Court in order that the City Council's record of
considerations may be examined and reviewed in light of the
twelve statutory requirements of section 11-2703.
Finally, the District Court found that the City Council's
resolution of intention to annex did not describe plaintiffs'
property with sufficient particularity, but held that
plaintiffs were estopped from challenging the annexation for
lack of notice because (1) the annexation process was initiated
by the plaintiffs, (2) because the annexation was for the
plaintiffs' benefit, and (3) because the plaintiffs enjoyed
the benefit of water and sewer services for three years before
challenging the legality of the annexation ordinance.
"The general rule that property owners are estopped by
reason of a long-continued acquiescence to question directly
the validity of the extension of the boundaries of a
municipality seems to be well-settled". 56 Arn.Jur.2d
Municipal Corporations 880, p. 134; see also, 101 A.L.R.
581. An explanation of the rule appears in Finucane v.
Village of Hayden (Idaho 1963), 384 P.2d 236:
"The general rule which respondents seek to
invoke is stated in McQuillin Municipal
Corporations, 3rd Ed., Vol. 2, 57.09, in the
following language, "If the elements of
estoppel are present, the owners of land
over which the municipal corporation has
exercised the powers and functions of govern-
ment for a long period of time will be
estopped from questioning the location of
the municipal boundaries.' Such rule has
application even though the proceeding by
which the municipal boundaries were extended
are void, when by reason of lapse of time
the municipal authority has been exercised
and there has resulted changed conditions
involving extensive public and private
interests. State ex rel. West v. City of
Des Moines, 96 Iowa 521, 65 N.W. 818, 31
L.R.A. 186.
"Such holdings are based upon public
policy. Where a municipal corporation and
the parties affected acquiesce in such action
by the officials of the corporation, and transact
business upon the theory that the land is
located within the boundaries of the municipality
it is in the interest of the general public that
such a rule be applied."
Plaintiffs contend the City's requirement that property
be annexed prior to extension of water and sewer services
is tantamount to coercion and thereby renders principles
of estoppel inapplicable to this case. However, plaintiffs
have not considered section 11-1001(4), R.C.M. 1947, now
section 7-13-4314 MCA which states:
"(4) Any person, firm or corporation receiving water
or sewer service outside of incorporated
city limits may be required by the city or
town as a condition to initiate such service
to consent to annexation of the tract of
property served by the city or town. The
consent to annexation is limited to that
tract or parcel or portion of tract or parcel
that is clearly and immediately and not
potentially being serviced by the said water
or sewer service."
Under the facts presented in this case, the District
Court properly concluded that plaintiffs were estopped
from challenging the legality of the annexation ordinance.
Remanded with directions.
We Concur:
-
Chief Justice
Ju ces